summary of proceedings - asian development … of proceedings of the forty-ninth annual meeting of...

SUMMARY OF PROCEEDINGS

Introductory Note

The Forty-Ninth Annual Meeting of the Board of Governors of the Asian Development Bank was held in Frankfurt, Germany from 2 to 5 May 2016.

This Summary of Proceedings of the Meeting is presented in accordance with the provisions of Section 9 of the Rules of Procedure of the Board of Governors.

The views expressed by ADB members at the Annual Meeting of the Board of Governors are those of the speakers and do not necessarily reflect the views and policies of ADB.

WooChong Um The Secretary

Asian Development Bank July 2016

Cover photo ©Photothek/BMZ

Summary of Proceedings of the Forty-Ninth Annual Meeting of the Board of Governors

The Forty-Ninth Annual of the Board of Governors was held in Frankfurt, Germany from 3 to 5 May 2016.*

The Honorable Gerd Müller, Federal Minister for Economic Cooperation and Development, and His Excellency, Horst Köhler, former Federal President of Germany, addressed the opening session on 3 May 2016, preceded by the President of the Asian Development Bank, Mr. Takehiko Nakao.

The Governor for Germany, the Honorable Hans-Joachim Fuchtel, chaired the Meeting. The Governor for Bangladesh, the Honorable Abul Maal A. Muhith, and the Alternate Governor for Timor-Leste, Mr. Helder Lopes, served as Vice-Chairs.

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* Seminars and other activities were held throughout the day from 2 to 5 May 2016.

Document No. BG49-1

SCHEDULE OF THE ANNUAL MEETING*

Tuesday, 3 May 2016 - 4:30 p.m. - Opening

- Address by the Guest of Honor

- Address by the President of ADB

- Cultural Event

- 6:00 p.m. - Adjournment

Wednesday, 4 May 2016 - 9:00 a.m. - Report of the Procedures Committee

- Statements by Governors

- 12:00 noon - Adjournment

Thursday, 5 May 2016 - 11:00 a.m. - Statements by Governors

- Report of the Procedures Committee (continuation)

- Remarks by the Chair-Elect

- Concluding Remarks

- 12:00 noon - Closing

* Seminars and other activities will be held throughout the day from 2 to 5 May 2016.

OPENING SESSION

Strengthening Partnerships for a Vibrant and Sustainable Asia

(As drafted)

Opening Address by ADB President Takehiko Nakao at the 49th Annual Meeting of the Board of Governors in Frankfurt, Germany on 3 May 2016

Introduction

Your Excellency Former Federal President Professor Horst Köhler, ADB Governors, distinguished guests, ladies and gentlemen,

I am honored to join Honorable Minister Gerd Muller and Honorable Governor Hans-Joachim Fuchtel, Chair of the Board of Governors, in welcoming you to the 49th Annual Meeting of the Asian Development Bank—our first annual meeting in Germany. I would like to thank the Government of Germany and the City of Frankfurt for their hospitality and excellent arrangements.

ADB was established in December 1966, so we turn 50 this year. I appreciate the support from all 67 members, development partners, and staff.

As a founding member, Germany is one of ADB’s most important shareholders, one of the largest donors of the Asian Development Fund (ADF), our concessional window, and one of the most active cofinanciers. Indeed, ADB’s first bond was issued in Deutsche Mark in Frankfurt and Dusseldorf in September 1969.

The Year in Review

2015 was a big year for the development community, marked by the adoption of the Sustainable Development Goals in September and the COP21 climate change agreement in December. 2015 was a big year for ADB as well. As I said in Baku last year, we continue to make ADB stronger, better, and faster.

Let me report to you the progress we have made over the past year. First, with unanimous support from donors and shareholders, we have agreed to substantially strengthen our financing capacity with the merger of the ADF lending operations and Ordinary Capital Resources (OCR) starting next year. As a result, we will be able to expand our annual loan and grant approvals by over 50%, from $13 billion in 2014 to more than $20 billion by 2020. Second, the scaling up of our operations is already making good progress. Approvals of ADB’s loans and grants were a record $16.3 billion in 2015, 21% over 2014 levels. With an additional $10.7 billion in cofinancing, total support to developing member countries reached $27 billion in 2015.

Third, disbursements of ADB’s own loans and grants reached a record $12.3 billion, 21% more than in 2014. As I have said many times, unless loans and grants are disbursed, they have no impact on development.

Fourth, our efforts in 2015 were not just about quantity. ADB delivered many proactive and innovative operations. These included (1) quick responses to natural disasters, especially the Nepal earthquake and cyclones in the Pacific, (2) prompt support to countries suffering from low

commodity prices and volatility in financial markets, (3) the first policy-based loan to the People’s Republic of China (PRC) by any multilateral development bank, and (4) issuance of our first green bond to finance ADB’s climate operations.

Fifth, we have continued to advance our own institutional reforms. Project processing and procurements have been further streamlined. Efforts to strengthen our human resources are ongoing. Seven sector groups and eight thematic groups are now in full swing, strengthening our knowledge work and supporting our regional and private sector departments.

I would like to also report that here in Frankfurt, we have just successfully concluded the negotiations for the replenishment of ADF 12. I highly appreciate donors’ generous support. This replenishment will allow us to increase our grant operations for poorest countries by 70% while reducing contributions from donors by almost half, thanks to the merger of the ADF lending operations with OCR. In using ADF, we will place a special emphasis on fragile and conflict affected countries and disaster risk reduction. As we are scaling up operations, we must continue to make utmost efforts to be efficient and effective. We will continue to optimize the use of our budget and staff resources. Also, we have started discussions on a new corporate strategy to better respond to evolving development challenges in the region.

Economic Outlook for Asia and the Pacific

Let me now turn briefly to the economic outlook for Asia and the Pacific. Over the last decade, Asia has grown about 7% annually, even after the global financial crisis. This has supported global growth.

The PRC is expected to grow 6.5% this year, down from 6.9% last year, reflecting its transformation to a new growth model. The region as a whole is projected to grow by a robust 5.7% in 2016.

India, with projected growth of 7.4%, is now the fastest growing large economy. Indonesia is expected to grow 5.2% in 2016, higher than last year despite the negative impact from lower commodity prices. Bangladesh, Cambodia, Myanmar, the Philippines, and Viet Nam are gaining growth momentum backed by reform efforts.

Some countries in Central Asia and the Pacific are affected by external factors, but they are making serious efforts to adjust. ADB stands ready to help.

Overall, Asia’s long-term growth potential is strong. In many countries, the population remains young, and is growing. This will bring large demographic dividends if we can create quality jobs. The middle class is expanding, providing a basis for strong consumption. There is still much scope to grow to catch up with advanced economies.

In order to realize their full growth potential, Asian countries must maintain sound macroeconomic policies, invest more in infrastructure, human capital and technology, develop efficient financial markets, and improve the investment climate.

ADB's Role and Partnerships in Job Creation, Private Sector Development, and Climate Actions

Ladies and gentlemen,

If Asia continues to grow steadily, its share of world GDP will rise from one-third today to more than one-half by 2050. Asia will continue to generate opportunities for investment, trade, and business for European countries. Asia is also becoming an important source of foreign direct investment in Europe.

Today, I would like to highlight three areas that are critical for a vibrant and sustainable Asia: one, creating quality jobs; two, promoting private sector development; and three, combatting climate change. For all three areas, we need stronger partnerships with all ADB stakeholders including private sector and civil society organizations.

Creating Quality Jobs

Let me start with quality jobs. Jobs empower people and reduce poverty in the most fundamental way. Employment opportunities, especially for our youth, are essential to make the economy vibrant and to promote social stability. We should also ensure a safe and decent work environment.

ADB is playing an important role in creating jobs and improving workplace conditions.

First, ADB supports education and skills development to increase the employability of youth, particularly women. For example, when I visited India this February, I was pleased to learn about good progress in an ADB-financed skills development program, which offers vocational training and career counseling in partnership with industrial associations.

Second, ADB promotes core labor standards and safe working conditions in cooperation with Germany and other partners. In Bangladesh, we extended a loan to a private sector bank to finance the improvement of health and safety conditions in textile factories. I believe this will also enhance the competitiveness of these factories as consumers around the world are now paying greater attention to the welfare of workers in value chains.

Third, needless to say, the most important role for ADB in promoting growth and employment is to support infrastructure investment. ADB finances infrastructure such as energy, roads, railways, ports, and water.

Especially, we are strengthening our support for infrastructure in fragile and conflict affected countries. In Afghanistan, for example, we have approved a $1.2 billion grant program to strengthen energy infrastructure.

Promoting Private Sector Development

The second area I want to highlight today is the importance of promoting private sector development. The private sector is the engine of growth. It drives innovation and creates opportunities. It is the basis for Asia’s vibrant future.

ADB’s direct financing of private sector companies and projects amounted to $2.6 billion last year, 37% higher than 2014. It ranged from supporting financial sector development, to

delivering infrastructure, to providing critical social services through the private sector—all with a strong focus on poorer countries. And, in addition to direct financing of the private sector, we are promoting the use of public-private partnerships (PPP) and improving the investment climate. Let me explain this in a little more detail. First, ADB supports financial sector development. In 2015, ADB approved loans and equity investments to private financial institutions in seven countries totaling over $750 million. In doing so, we paid special attention to underserved customers, such as farmers, women entrepreneurs, and micro, small and medium sized enterprises.

Second, we provide loans, equity investments, and guarantees to private companies that build and operate important infrastructure. For every dollar ADB provides, we mobilize at least $4 more in commercial cofinancing.

Third, we help strengthen social service provision through the private sector. In Myanmar, we are financing the expansion of a private sector, third-generation telecommunications network. This includes the skills development of women in ICT, and mobile applications for health, banking, and agriculture.

Fourth, more than 40% of the private sector transactions we approved in 2015 were to companies, banks, and projects in poorer countries. To undertake small but innovative transactions in these countries, we introduced a faster and streamlined approval process in 2015. Using this process, we quickly approved our first private sector equity investment for an agribusiness venture in Bhutan.

Fifth, we are strengthening our support for PPPs. Our newly established PPP Office is acting as transaction advisor to the government of the Philippines on the North–South Railway Project. This $3.8 billion project will build or upgrade 650 kilometers of railways. Our PPP Office is also advising on a container terminal project at Colombo Port in Sri Lanka. We are advisor for a $10 billion PPP gas pipeline project across Turkmenistan, Afghanistan, Pakistan, and India.

The most challenging part of PPP transactions is finding and preparing bankable projects that can attract private sector money. To support the preparation of PPPs, in January we launched the Asia Pacific Project Preparation Facility (AP3F) with support from the governments of Australia, Canada, and Japan.

Finally, ADB helps to improve the overall investment climate through technical assistance and policy-based loans. In Indonesia, our $400 million Growth Acceleration Program Loan supported improvements in regulations, licensing, and the PPP framework.

Combatting Climate Change

Let me now turn to the third and final area––climate change. Asia and the Pacific face multiple and increasing climate challenges, such as extreme cyclones, droughts, coastal erosion, floods, and melting glaciers. Climate action is fundamental to the region’s sustainable development.

ADB is strengthening its climate actions.

First, ADB is doubling its annual climate financing to $6 billion by 2020. Of this, $4 billion will support mitigation through investments in sustainable transport, clean energy, and energy efficiency. The other $2 billion will be for adaptation through more resilient urban infrastructure, climate-smart agriculture, and better preparation for climate-related disasters.

Second, we are seeking more cofinancing from bilateral and multilateral partners for climate actions.

In 2014, we signed a $2 billion cofinancing partnership with KfW with a focus on clean energy and urban infrastructure.

In our new partnership with the Asian Infrastructure Investment Bank, we will make climate change a priority.

In Fiji, a grant from the Green Climate Fund (GCF) financed the incremental costs to make an ADB-financed water project resilient to sea level rise. When I visited Fiji last August, I was moved by the strong commitment of the government to combat climate challenges. So, it was even more shocking to me that earlier this year Cyclone Winston inflicted a tragic loss of life and economic damage on this beautiful island country. We should strengthen our support to small island countries by mobilizing various climate funds including GCF and the Global Environment Facility.

Third, partnerships with the private sector are crucial to introducing innovative finance to address climate change. We are working with leading re-insurance companies, including some in Europe, to develop disaster risk insurance in Asia and the Pacific. And we recently helped guarantee the first climate bond in Asia for a private sector geothermal project in the Philippines. Fourth, without the use of frontier technologies, COP21 targets will not be achieved. We are adjusting our project design and procurement procedures to promote the use of cleaner and more advanced technologies.

Finally, ADB is enhancing its support to governments’ policy frameworks for implementing their Intended Nationally Determined Contributions based on the COP21 agreement. For this purpose, we are using a mix of technical assistance, loans and grants, and high-level policy dialogue.

An example of ADB support is our policy-based loan of $300 million to the PRC approved last year for air quality improvement in the Beijing-Tianjin-Hebei greater capital area. This loan supports policy actions such as enhanced monitoring of polluting industries and guidelines for converting coal to gas.

Conclusion


When ADB was established 50 years ago, Asia was poor, and one of the most important challenges was how to feed the large and growing population. Asia has achieved a lot since then.

Yet, many challenges remain in Asia. 450 million people still live in extreme poverty. We need to create jobs for the increasing number of young people. Gender equity should be enhanced. The private sector should be further developed. Climate actions are urgent.

In addressing these challenges, ADB will continue to play a critical role in building an Asia and Pacific region that is vibrant and sustainable. For this, we need stronger partnerships with all of you. I call on your continued support.

The world famous poet and statesman Johann Wolfgang von Goethe, who was born here in Frankfurt, said (and I quote): “The greatest part in this world is not so much where we stand. It is in what direction we are moving”.

Let us move forward together.

Thank you.

Opening Address by Federal Minister for Economic Cooperation and Development Gerd Müller at the 49th Annual Meeting of the Board of Governors in Frankfurt, Germany on 3 May 2016

Check against delivery!

Professor Köhler, President Nakao, Excellencies, Ladies and gentlemen, We all live in One World. Thus, it is our shared task to eradicate poverty, not destroy the environment, and protect the world's climate, water, land and oceans. We only have this one planet. These are crucial issues for the survival of humankind. We are all in the same boat. Asia today accounts for more than half of the world's population, but also for more than half of the world's poor and more than half of the world's greenhouse gas emissions. Not only the fact that Asia is growing but, above all, the way that Asia is growing will have a decisive influence on our planet over the coming decades. We – Germany, Europe, the industrialized countries, we who are engaged in mutual trade and exchange – have to reach completely new dimensions of making growth socially, environmentally, economically and culturally sustainable. We are not the ones who know it all – we learn from each other, and we want to be partners. And we now have to send a signal for a paradigm shift toward a globally sustainable econ-omy. In India, for example, we are working with ADB to provide loans for Green Energy Corridors. This is energy that lifts people out of poverty, rather than creating new poverty by destroying people's livelihoods. Or if we look at the question of opportunities, we are supporting twelve Asian countries in the field of vocational education. Our plan is to combine large-scale ADB financing projects with vocational training in future, because training is the basis for any kind of future development. Take the topic of standards – prompted by us, ADB has established a credit line in Bangla-desh for textile companies. This enables them to invest in safety and environmental protec-tion. The idea is to reduce the use of toxic substances, improve working conditions and give workers more rights. For almost exactly fifty years, the Asian Development Bank has been an indispensable part-ner for us. However, the challenges have not become any smaller. The infrastructure gap alone is estimated to require some 800 billion US dollars a year. And the vital climate target we adopted in Paris can only be achieved with Asia on board. So it is good that ADB is planning to double its climate investments by 2020. More than ever before, we need a strong and innovative Asian Development Bank. And we need strategies that are harmonized with the new Asian Infrastructure Investment Bank – we need to work together, not alongside each other or against each other! But above all, more private capital must be channeled into sustainable development. How can we do that? This is the key question at this Annual Meeting. Yesterday, we provided some answers to this question. For instance, we want to lay the foundations for a new financing and insurance instrument in Asia – a climate fund. The entire financial industry needs to take on more environmental and social responsibility, so that we manage to make the transition to a zero carbon economy and ensure that it is not the poorest who pay the price of globalization.

Policymakers, in their turn, must make a systematic effort to get banks to take these issues on board. For instance, we want the ILO core labor standards to be made a binding part of the lending rules of multilateral development banks – from the World Bank to ADB, which is already leading the way. This would lend massive momentum to socially responsible invest-ment. And in the long term it would set the standard for all. Mr. Jin, we are looking forward to working together with the new AIIB. There are more than enough things that need financing. We need a competition of ideas to achieve a future that has to look different from the present. For example, new cities must not be built in the same way as before. Otherwise, the production of cement and steel alone will almost exhaust the carbon budget that would enable us to reach the 1.5 degree target by 2050. We need innovation – leapfrog innovation. Those who are currently in the process of de-velopment have the great opportunity to do things better from the outset, better than we did in the past. It is perhaps the greatest challenge for humankind to reconcile the previously opposing aims of development and sustainability. The 2030 Agenda, our pact on the future of our planet, will provide the framework for that. And nobody has been as closely connected to that agenda as our former German President, Professor Köhler. We look forward to your keynote address!

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Opening Address by Former Federal President of Germany Horst Köhler at the 49th Annual Meeting of the Board of Governors in Frankfurt, Germany on 3 May 2016

A new global social contract

I am honored to be able to speak to you today, but also humbled by the task. Your annual meeting is happening at a time of uncertainty. The world is in crisis mode – the refugee crisis, the chaos in the Middle East, the worries about the world economy, the ongoing environmental crises in many parts of the world, including Asia... We all know this list. And yet what is especially worrisome is that there doesn’t seem to be much confidence about how to really get out of the several messes we are in. Maybe the biggest crisis of all is the crisis of confidence in the ability of politics to find lasting solutions.

At a time where crises suck up all the political oxygen in the room, it can be difficult to find energy to think about more fundamental issues. And yet I believe that this is exactly what we have to do: to not get overwhelmed by crisis mode, but to try to understand how we got to the current state of disorder. Only if we realize the underlying causes of today’s problems will we be able to do more than just fighting symptoms.

I believe that our political and economic systems, both on the national and the international level, have not yet found a way to adapt to the two most fundamental realities of the 21st century. These realities are, first: our challenges are global, and second: our challenges are long-term. Conversely, the two most fundamental illnesses of our times are nationalism – disrespecting others – and short-termism – disrespecting the future.

Why is it, firstly, so hard to cope with the irrefutable fact of interdependence? Be it global warming, be it terrorism, be it pandemics, be it migration, be it the world economy – the big challenges are connected globally, and no sustainable solutions can be found by any one nation alone. Policies pursued at one end of the globe have an effect on the other end.

Why is it, secondly, so hard to accept the fact that the choices we make today are having an effect far into the future? Of course, „in the long run we are all dead“. I wouldn’t dare to contradict John Maynard Keynes here. And yet it is our children who will be alive when we are dead, and we should leave them a world which is better than ours: a world with at least the same degrees of freedom that we are enjoying today. But looking at our greenhouse gas emissions, at some recent dangerous ventures in the area of foreign policy, or at some of today’s monetary and fiscal policies, it is clear that we continue to debt-finance our present by borrowing from the future. The convenient but illusory solutions of today are paid for with natural resources and trust resources and financial resources of the next generation.

Of the many conclusions that we need to draw from the inconvenient realities of interconnectedness and long-term impact, there are three that I would like to share with you today.

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Cooperation is not a sign of weakness, but the only solution to our common problems The simple truth is: we are all in the same boat. Pursuing national interests by confrontation is, at the end, self-destructive. In this interconnected world, we must stop fooling ourselves: whoever tries to strengthen oneself by weakening others, whoever tries to escape responsibility by shifting the burden to others will not solve any problem, but only postpones the problems to tomorrow, when they will come back like a boomerang, with even greater force. No country, as powerful or rich or populated as it may be, can in the long run gain or sustain its prosperity without taking into account the perspective of the other countries. In short: Interdependence forces us into cooperation. The fact of interdependence urgently calls for a new thinking in international politics, a new spirit of cooperation for mutual benefit, solidarity and mutual accountability. I like to call this a “new leitmotif of global partnership”. Such a leitmotif must not deny the existing asymmetries and differences, but find a way to constructively and honestly deal with them. Working towards this is not naiveté, but reason; it is not idealism, but the true

realpolitik in the 21st century.

And despite all the divisions and difficulties, the year 2015 has given reason for some optimism that the awareness for this spirit is indeed rising. With the Paris Agreement and the 2030 Agenda on Sustainable Development, the United Nations, the governments of this world – all of them! – agreed that the biggest challenges of our times, extreme poverty and global warming, can only be addressed if we work together as a global community. They agreed that these challenges need a long-term political approach. These two agreements are an important counterweight to the current atmosphere of distrust and tension and cluelessness in world politics. We must never believe those who tell us that the politics of division and egotism are “just how things are”. There is another path, and never before has it been clearer what this path must be.

We need a structural transformation of our economies and societies - everywhere I believe that it is no accident that the Paris agreement and the 2030 Agenda with the Sustainable Development Goals were adopted in the same year, 2015. They are twin sisters, because together they make clear how saving our planet is inextricably linked to eradicating extreme poverty and vice versa. The two things must not and cannot be achieved at the expense of one another. And this is why the 2030 Agenda and Paris are universal agendas, calling for change not just in developing countries and emerging economies, but in industrialized countries as well. The 2030 Agenda and the Paris agreement are a political framework for transformation everywhere, in the North and the South, the East and the West.

There is no country that has yet learned to decouple economic progress from resource consumption and ecologic destruction. Consequently, the growth model that has brought prosperity to many parts of the world is coming up against its limits. Nature does not allow us to grow the way we were used to. The warning signs can be breathed from New Delhi to Beijing; they can be felt from the Sahel zone to the coasts of America; they can be seen on the mountain tops of the Alps and the glaciers of Antarctica. If extreme poverty could only be eradicated at the expense of ruining the very natural environment that humans need to live, if prosperity could only be attained on the basis of an old, resource-intensive, dirty, unsustainable and thus ultimately irresponsible growth model – if that were the case, then there would be little hope left for the human race. There has to be another way.

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I am no fan of the term “green growth” because I believe it underestimates the profoundness of the change that is necessary. A change of color will not be enough. What is needed is a structural transformation of our economies and societies. The key: prices must tell the truth about the real costs of products and services (and yes, we need an effective price on carbon emissions). We must free ourselves from our dependence on fossil fuels, we must rethink mobility and transportation, we must change our production and consumption patterns. It is encouraging to see how much innovation is happening in that regard all around the world. Still, we know this is only the beginning. Difficult choices lie ahead. A world economy that provides a path to a dignified life for all, also for our children’s children, will produce new winners and losers. Therefore, a new great transformation also requires systematic attention to inclusive and responsive governance on all levels, mediating these changes. The great transformation is a truly crosscutting herculean task for all areas of government. So please, please!, let’s not pretend that this is an issue for environmental ministries or development partners alone. And, ladies and gentlemen, this must also touch the core of tax codes and fiscal policies and industrial strategies. Dear Finance Ministers – this is your homework, too!

We need a global social contract that takes a global perspective on growth Economists love growth. Politicians love growth even more. And they have good reasons to do so: growth is a measure of human progress, a sign of creativity and inventiveness, an enabler and creator of prosperity and wellbeing. But our love of growth must not blind us: growth is a means, not an end. Growth rates per se do not necessarily reflect progress in the real economy or improvements in the wellbeing of people – take, for example, the financial markets with their inflated growth rates that are decoupled from the real economy, or the jobless growth we have seen in some Asian and many African economies.

Treating growth rates like a universal, magical cure is not only not helping, it actually has side effects which are increasingly endangering the fundamental health of the world economy.

I believe that we have to concentrate on three questions: Where does growth come from? What is it that should grow? And where should it grow?

Regarding the first question on the sources of growth, allow me to say this: flooding the market with cheap money is not a viable long-term strategy. We must not forget one of the major lessons of the financial crisis – money might make money, but money does not create value. People create value, with their ideas and their hard work. So the best stimulus program is the one that stimulates the minds of the people, one that builds a structural environment enabling their dreams and aspirations to become reality.

I therefore have no doubt: a new, great transformation towards sustainability and prosperity for all is not a threat, but a promise. It is in itself a driver of growth. If the governments of this world, if all of us take the implementation of the 2030 Agenda for Sustainable Development and the Paris Agreement seriously, then I guarantee you: this will become the biggest stimulus program and the most enduring stimulus program of all times. Finding new ways for prosperity everywhere within the planetary boundaries is a challenge that will require an endless amount of imagination and innovation. We just need the courage for policies which set this imagination free. In a world of limited resources, there is one resource that can grow infinitely: the human mind.

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Furthermore, we must not shy away from the question of where material growth is a real and urgent necessity. Yes, in those countries where there are still people living in extreme poverty, we need more schools and more hospitals and more energy plants and more roads and more services and more IT. But do we really need more cars in Germany? From a global perspective, isn’t it ironic that the North is desperately trying to push demand at any cost while there is almost unlimited demand in the South? Isn’t it paradoxical that the advertising industry in the rich countries is spending billions to convince people to consume things they don’t really need, while in poor countries there are unmet needs so obvious and so basic?

I would like to encourage all of us, especially the economists among us, to not get used to this absurdity and to not accept this as normality.

I am asking again: What is it that should grow? And where should it grow?

These questions should challenge us to have a more differentiated, more global perspective on growth. Maybe the richer countries need to find new ways in defining well-being in order to make room for more growth – growth in those countries where economic development is a question of survival. And make no mistake: the task of providing jobs and perspectives to the massively growing youth population of Africa and many parts of Asia is not a task for these regions alone. It is a truly global challenge. Its success or failure will decide not only the fate of these countries alone, but of the whole world.

And because we are all in this together, we need new bridges between the regions. I

believe that the demographic and economic challenges marking the 21st centurycall for a global social contract; a new awareness that seeks justice and mutual benefit not least between the ageing societies of the rich countries and the societies with a rapidly growing youth population. We need each other to survive. The bridges we build should include ways for legal migration as well as a truly fair and development-friendly global trade regime. In that context, allow me to tell you – and I am sorry I cannot hide my anger about this: abandoning the Doha round was and is a mistake of historic proportions. Again, we urgently have to rethink our growth models, which should complement each other instead of eating each other up.

Maybe there could also be new ways to use the gigantic amount of capital in the savings-heavy ageing societies which today is desperately looking for return – to redirect it to where it is really needed, in the real economies of the South, in order to build infrastructure or support education or create jobs. Couldn’t the IFIs be at the forefront of such a new global social contract, couldn’t they be the architects of the financial bridges, together with their shareholders, developing stronger risk hedging mechanisms that make such bridges viable?

Ladies and Gentlemen, Dear governors, I have outlined some thoughts on why I believe we need a new spirit of partnership in international politics, underpinning a structural transformation of our economies and societies. This could ultimately lead to a new global social contract between the rich and the poor, the old and the young, between today and tomorrow.

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You might say that this is stuff for inspirational speeches, not for concrete politics. But looking at the world today, I am more than ever convinced that the old thinking which got us into the mess will not lead us out of it. A new world requires new thinking.

And I passionately believe that the IFIs, and not least the Asian Development Bank, can be vanguards of this new world. You can live the spirit of cooperation and partnership that is needed in this interconnected world. You can catalyze finance and investment into the transformation of economies that lifts people out of poverty while respecting the planet. You can build bridges between societies and put the money where the real need is.

My point is this: the world needs you, ADB! Do not underestimate the part you can play. Think big. Challenge the old ways. Find new paths to push forward myriads of transformations on grassroots level which then translate into the great transformation. Make change happen where the people can see it, feel it, breathe it. Have the courage to pursue policies which are good not only for our generation, but also for our children’s children, even if that means confronting resistance to change. Listen to each other, because nobody has all the answers.

In our age of crises, I am firmly convinced that only those who will adapt to the fundamental realities of interdependence and long-term impact will be able to secure a good future for all. I trust that the ADB will be on the right side of history. If you now set the course, then the biggest achievement of all is within your reach: a world in which every child, man and woman can live a life in dignity, within the natural boundaries of our common planet earth. In order to get there, we all need to change. Let’s start today.

I wish you a productive, visionary and joyful annual meeting. Thank you.

BUSINESS SESSIONS

©Photothek/BMZ

Document No. BG49-2

PROVISIONS RELATING TO CONDUCT OF THE ANNUAL MEETING

Admission

1. Sessions of the Board of Governors of ADB will ordinarily be open to advisers of memberdelegations, accredited observers, guests, media, nongovernment organizations and other civilsociety organizations, the meeting secretariat, and ADB staff.

2. Meetings of the Procedures Committee, should they be called, shall be open to Governors whoare members of the committee and their advisers, and others as may be considered necessaryby the Chair of the committee.

Order of Speaking and Records

3. The Chair of the Board of Governors will establish the order of speaking at each session.Governors desiring to speak will generally be recognized in the established order of speaking.

4. There will be two business sessions. Instead of delivering an oral statement during a businesssession, Governors will have the option to submit a written statement only, which will beuploaded on the ADB website following the first business session. Governors will also have theoption to deliver an abridged oral statement during the business session with a complete writtenstatement posted on the website immediately after delivery. Joint statements are encouraged.

5. Governors are expected to keep their oral statements short. In cases where a longer statementis considered necessary, Governors may provide The Secretary with the full text for the record.

6. Messages or statements by observers may be brought to the attention of the meeting bycirculation through the Office of The Secretary.

7. The Secretary will keep a summary of the proceedings of the Annual Meeting, which will bemade available to members as soon as possible after the meeting. Governors are requested tosubmit their statement in English (the official language of ADB) for inclusion in the proceedings.

Procedures Committee

8. Before the meeting, the committee will consider (via correspondence) and makerecommendations to the Board of Governors on the schedule and agenda for the meeting, andthe provisions relating to the conduct of the meeting (and any procedural matters). A report ofthe Procedures Committee will be prepared. Notwithstanding this arrangement, the ProceduresCommittee members will need to be available to convene during the meeting should the needarise.

Public Information

9. The Chair of the Board of Governors and the President of ADB may communicate to the mediasuch information concerning the proceedings of the meeting as they may deem suitable.

Document No. BG49-3

AGENDA

1. Annual Report for 2015

2. Financial Statements, Management's Report on Internal Control over FinancialReporting, and Independent Auditors' Report

3. Allocation of Net Income

4. Budget for 2016

5. Resources of ADB

6. Review of Rules and Regulations

7. Officers and Procedures Committee for 2016/2017

PROCEDURES COMMITTEE

©Photothek/BMZ

4 May 2016

REPORT OF THE PROCEDURES COMMITTEE FOR 2015/16

The Procedures Committee for 2015/16—consisting of the governors for Afghanistan, Australia, the People’s Republic of China, Germany, Japan, Malaysia, the Netherlands, Pakistan, Portugal, Tonga, the United States, and Vanuatu—considered by correspondence and on a no-objection basis the (Draft) Report of the Procedures Committee for 2015/16 on 27 April 2016.

The committee submits the following report:

1. Provisional Schedule of the Annual Meeting

The committee recommends that the Provisional Schedule of the Annual MeetingMeeting (BG49-1) be approved with such changes as the chair may announce during the course of the meeting.

2. Provisions Relating to Conduct of the Annual Meeting

The committee recommends that the Provisions Relating to Conduct of the AnnualMeeting (BG49-2) be approved.

3. Agenda for Meeting

The committee recommends adoption of the Agenda (BG49-3). Regarding the items onthe agenda, the committee reports as follows:

(i) Annual Report for 2015. The committee recommends that the Board of Governors take note of the Annual Report.

(ii) Financial Statements, Management's Report on Internal Control over Financial Reporting and Independent Auditors’ Reports. The committee noted the report of the Board of Directors (BG49-4) and recommends that the draft resolution entitled “Financial Statements, Management's Report on Internal Control over Financial Reporting and Independent Auditors’ Reports” be adopted by the Board of Governors.

(iii) Allocation of Net Income. The committee noted the report of the Board of Directors (BG49-5) and recommends that the draft resolution entitled “Allocation of Net Income” be adopted by the Board of Governors.

2

(iv) Budget for 2016. The committee recommends that the Board of Governors take note of the report of the Board of Directors on the ADB and ADB Institute budgets for 2016 (BG49-6).

(v) Resources of ADB. The committee recommends that the Board of Governors take note of the report of the Board of Directors (BG49-7).

(vi) Review of Rules and Regulations. The committee recommends that the Board of Governors take note of the report of the Board of Directors (BG49-8).

(vii) Officers and Procedures Committee for 2016/17. The committee recommends that a Procedures Committee be constituted consisting of the governors for Armenia, Australia, Bangladesh, Canada, the People’s Republic of China, Italy, Japan, Luxembourg, Myanmar, Papua New Guinea, Philippines, and the United States. The committee should be available for consultations at the discretion of the chair regarding the schedule of meeting, provisions relating to conduct of meeting, the agenda for the meeting, and any procedural matters, by correspondence, and if necessary, by convening immediately before or during the Fiftieth Annual Meeting. The committee further proposes that the Governor for Japan be appointed chair of the Procedures Committee.

The committee also proposes that the Governor for Japan be elected chair and the governors for Italy and Pakistan be elected vice-chairs of the Board of Governors for 2016/17.

Document No. BG49-4 15 April 2016

FINANCIAL STATEMENTS, MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND INDEPENDENT AUDITORS’ REPORTS

REPORT OF THE BOARD OF DIRECTORS

In accordance with Article 31 (iii) of the Articles of Agreement and Section 15 of the By-Laws, the audited financial statements of ADB for 2015, including the financial statements for the operations of Special Funds, as contained in the Annual Report for 2015, are submitted for approval, together with the text of a draft Resolution.

Attachment to Document BG49-4

(DRAFT) RESOLUTION NO. ___


The Board of Governors Having reviewed the Independent Auditors’ Report on the Financial Statements and

Management's Report on Internal Control over Financial Reporting of ADB for 2015

RESOLVES:

That the audited Financial Statements as contained in the Annual Report of ADB for 2015, which include separate financial statements for the operations of Special Funds, are approved.


ALLOCATION OF NET INCOME


1. ADB's net income from its ordinary capital resources for the year ended 31 December 2015, after appropriations of guarantee fees of $19,028,432 to the Special Reserve in accordance with Article 17 of the Articles of Agreement, amounted to $537,135,424. With respect to such amount, the Board of Directors, after due consideration, recommends that the Board of Governors adds $43,300,000 from Loan Loss Reserve and adds $212,744,834 to Cumulative Revaluation Adjustments; and allocates $207,690,590 to Ordinary Reserve;$120,000,000 to the Asian Development Fund (ADF); and $40,000,000 to the Technical Assistance Special Fund.

2. The net income from the ADF for the year ended 31 December 2015 amounted to$87,537,453 excluding the effect of each of the following: accounting treatment of expensed grants and translation adjustment of currencies. Under the regulations governing the ADF, the net income of the ADF is required to be retained in the ADF, except that the Board of Governors may transfer some of the net income to be applied towards technical assistance grants. Owing to the need for further resources for concessional lending, no such transfer is recommended by the Board of Directors.

3. A draft Resolution implementing the recommendation in paragraph 1 above is attached.

Attachment to Document BG49-5

(DRAFT) RESOLUTION NO. ___

ALLOCATION OF NET INCOME

The Board of Governors

Having considered the Report of the Board of Directors on the allocation of the net income of ADB's ordinary capital resources and the Asian Development Fund for the year ended 31 December 2015

RESOLVES:

That, of the net income of ADB from its ordinary capital resources for the year ended 31 December 2015 amounting to $537,135,424, after appropriation of guarantee fees of $19,028,432 to the Special Reserve,

(a) $43,300,000 representing the adjustment to the loan loss reserve as of31 December 2015, be added from the loan loss reserve to the netincome;

(b) $212,744,834 representing the ASC 815/825 adjustments and theunrealized portion of net income from equity investments accounted forunder the equity method, for the year ended 31 December 2015, be addedto the Cumulative Revaluation Adjustments account;

(c) $207,690,590 be allocated to Ordinary Reserve;

(d) $120,000,000 be allocated to the Asian Development Fund; and

(e) $40,000,000 be allocated to the Technical Assistance Special Fund.


BUDGET FOR 2016


I. ASIAN DEVELOPMENT BANK

1. A report on the 2015 budget of the Asian Development Bank (ADB) was submitted to theBoard of Governors at the 48th Annual Meeting in May 2015.1

2. Actual net internal administrative expenses (IAE) for 2015 totaled $539.05 million(Appendix 1). The actual net IAE, after taking into account the carryover of $12.35 million,totaled $551.40 million compared with the original budget of $617.70 million.

3. On 16 December 2015, the Board of Directors approved the net IAE budget of$635.62 million for 2016, including a general contingency of 1% ($6.31 million) and afterdeducting the estimated fee reimbursements of $8.43 million from trust funds (Appendix 1). Thenet IAE budget of $635.62 million for 2016 is $21.68 million, or 3.5%, higher than the 2015midyear estimate of $613.95 million. The 2016 net IAE budget consists of $622.32 million forADB, excluding (i) $1.66 million for the Compliance Review Panel and the Office of theCompliance Review Panel (Appendix 2), and (ii) $11.64 million for the Independent EvaluationDepartment (Appendix 3).

4. To further improve transparency in the presentation of budget, accounting accruals forstaff retirement plan and post-retirement and group medical insurance plan are shownseparately as below-the-line item in Appendix 1.2

5. The proposed budget will meet the core requirements of ADB’s 2016 work program,including (i) scaling up operations by frontloading some of the additional resource requirementsfor 2017, (ii) continuing the implementation of the Midterm Review of Strategy 2020 action plan,(iii) increasing ADB’s contribution rate to the Staff Retirement Plan, and (iv) funding the EarlySeparation Program. At the same time, ADB will work to minimize cost increases through theoptimal use of staff and better human resources management, and continue to contain budgetgrowth through more effective monitoring and implementation to get the best value for money.The following are the key cost drivers in 2016:

(i) scaling up operations for approval in 2016 and preparing to scale up further in2017, with commensurate strengthening of project management for better andfaster client services and delivery;

1 ADB. 2015. Report of the Board of Directors to the Board of Governors: Budget for 2015. Manila. 2 ADB. 2015. Budget of the Asian Development for 2016. Manila.

2

(ii) enhancing cofinancing and trust fund operations so that total annual cofinancingexceeds the value of ADB’s stand-alone project financing by 2020;

(iii) expanding nonsovereign operations to reach 25% of total market-based ordinarycapital resources (OCR) lending approvals, and increasing their share in less-developed and fragile economies to 40% (by number) by 2020;

(iv) rebalancing the ADB operations portfolio to (a) expand the education and healthsector portfolios; (b) focus more on inclusive growth, climate change, andinnovation in operations; and (c) offer better knowledge services;

(v) rolling out of public–private partnership operations to foster client demand andgrowth in transaction advisory services;

(vi) mainstreaming delegation to resident missions, and strengthening theheadquarters–resident mission interface through continued staff outposting andnew or upgraded hubs and offices;

(vii) strengthening procurement capacity and reforms;(viii) improving the information technology (IT) infrastructure and platform through

systems integration to support larger operations, including services to residentmissions and developing member countries; and

(ix) improving business continuity and emergency preparedness in headquarters andresident missions.

6. ADB will need to judiciously manage resource requirements in scaling up operations forthe combination of the Asian Development Fund (ADF) and OCR. ADB will maintain servicestandards for day-to-day activities through vigorous efficiency measures, while allocatingsufficient resources to (i) seek new business opportunities, (ii) invest in critical IT reforms,(iii) upgrade staff skills and enhance redeployment, and (iv) hire additional staff where an urgentskills gap for priority work areas is unmet.

7. ADB plans to absorb incremental work increases through additional capacity forinternational staff to concentrate on front-end work. This capacity will be generated byempowering national staff, delegating responsibilities to resident missions, and improvingbusiness processes. This will assist in exploring new business opportunities, developing aconcrete pipeline, and advancing procurement actions. Ongoing and planned efficiencymeasures include (i) streamlining business processes, (ii) staffing optimization, (iii) businesstravel policy reforms, (iv) effective use of staff consultants, (v) IT efficiency, (vi) outsourcing ofadministrative and noncore services, and (vii) environmental initiatives.

8. Appendix 4 provides a comparison of the 2016 work program with the actual results for2015 and 2014.

9. Appendix 5 presents a distribution of operational expenses by departments and offices.Appendix 6 provides a comparison of operational expenses by program category.

10. In addition to the IAE budget, the 2016 budget includes an annual capital budget of$9.10 million, which is provided mainly to (i) fund cyclical capital expenditures for headquartersfacilities and IT; and (ii) meet replacement and new requirements of field offices for vehicles,furniture, office equipment, and IT. The capital budget also funds safety- and security-relatedexpenditures.

3

II. ASIAN DEVELOPMENT BANK INSTITUTE

11. The actual expenses of the ADB Institute for 2015 totaled $10.86 million, representing autilization rate of 68.5% of the budget of $15.85 million (Appendix 7). The actual utilizationconsisted of $3.00 million for program expenses and $7.86 million for IAE.

12. On 16 December 2015, ADB’s Board of Directors approved the 2016 budget of$15.70 million for the ADB Institute (Appendix 8), comprising $5.29 million for programexpenses and $10.41 million for IAE.

13. The program expenses budget of $5.29 million consists of $3.16 million for the researchprogram and $2.12 million for capacity building and training. The IAE budget of $10.41 millionincludes a 5% general contingency of $0.50 million.

14. The program expenses budget of $5.29 million accounts for 34% of the ADB Institutebudget. The program-related IAE budget totals $6.22 million, or 40% of the total budget. Theseexpenses include (i) staff costs; (ii) business travel for research, and capacity building andtraining; and (iii) other administration, management, and coordination expenses, includingadvisory council. The budget for program and program-related IAE totals $11.50 million, or 73%of the total budget.

15. In addition to the IAE budget, the 2016 budget includes an annual capital budget of$91,000 for upgrading the server system.

4 Appendix 1

ASIAN DEVELOPMENT BANK INTERNAL ADMINISTRATIVE EXPENSES

COMPARISON OF 2016 BUDGET WITH 2015 BUDGET AND ACTUAL RESULTS ($’000)

2016Item Budget Actual BudgetA. Board of Governors 2,391 2,148 2,197

B. Board of Directors 31,630 29,128 32,782 Offices of the Directors 17,881 16,502 18,407Accountability Mechanism 2,512 2,051 2,733Independent Evaluation 11,237 10,575 11,642

C. Operational Expenses 463,348 410,834 471,841 Salaries 236,868 216,896 243,793Benefits 148,056 131,054 149,965Staff development 7,400 5,685 7,500Relocation 8,865 4,784 9,100Consultants 27,771 25,516 27,437Business travel 33,818 26,494 33,489Representation 570 405 557

D. Administrative Expenses 122,384 105,086 123,648 Communications 10,394 8,349 10,028Office occupancy 31,249 26,610 32,388Library and subscription 1,514 1,538 5,542Office supplies 1,836 1,216 1,806Equipment, maintenance, and support 10,903 8,789 10,821Contractual services 32,864 29,215 31,069Insurance 5,117 5,349 6,388Depreciation 26,146 23,181 23,336Miscellaneous 2,361 839 2,270

Total Regular Programs 619,753 547,195 630,468 E. General Contingency 6,198 0 6,305

Gross IAE 625,951 547,195 636,773

F. Fee Reimbursements (8,250) (8,150) a (8,425)IAE before Early Separation Program 617,701 539,045 628,348 Early Separation Program … … 7,276

G. Net IAE 617,701 539,045 635,624 b

H. Carryover 2% of IAE Budget … 12,354 c …I. Net IAE after Carryover 617,701 551,399 635,624

Externally Funded Programd 850 839 1,423

2016Estimate Actual Estimate

Memo Item (A) (B) (C)

Gross Administrative Expenses 625,951 547,195 e 644,049

Accounting Adjustments 87,550 113,302 114,264

Accrual for SRP 76,734 113,354 119,633

Accrual for PRGMIP 30,116 22,102 17,679

Loan origination costf (19,300) (20,876) (23,048)

Other adjustmentsg … (1,277) …Overall Administrative Expenses 713,501 660,497 758,313

Note: Numbers may not sum precisely because of rounding.a

b

c

d

e

f

g

2015

… = not available or not calculated, ( ) = negative, IAE = internal administrative expenses, PRGMIP = post-retirementgroup medical insurance plan, SRP = staff retirement plan.

This amount reflects the estimated total expenses apportioned during the year for administering external grantsexcluding Japan trust funds.

Net IAE for 2016 consists of $622.32 million (including ($7.28 million for early staff separation program) for ADB,$11.64 million for the Independent Evaluation Department (IED) and $1.66 million for the Compliance ReviewPanel and Office of the Compliance Review Panel.

In 2006, the Board of Directors approved the introduction of a budget carryover of up to 2% of the net IAE budgetto the next year, beginning with the 2007 budget. Accordingly, $12.35 million (about 2% of the 2015 net IAEbudget) has been carried over to 2016.

2015

External funds include (i) estimated sponsor-funded programs for staff and associated costs under Australia’sDepartment of Foreign Affairs and Trade and the Government of the Federal Republic of Germany, and (ii)external grants for staff and related costs under selected trust funds.

Refers to administrative expenses related to loan origination. Accounting standards required that a portion of theloan origination costs be deferred and amortized over the life of the loan. ADB defers 20 basis points of theamount of loans that become effective to represent the amount of loan origination costs that need to be deferred.

Refers to adjustments net of accrued resettlement and repatriation allowances and severance payments, costs forAfghanistan Guest House and Public Information Center and other miscellaneous items and expenses of the JapanSpecial Fund.

Refers to actual administrative expenses before adjusting for fee reimbursements.

Appendix 2 5

ASIAN DEVELOPMENT BANK COMPLIANCE REVIEW PANEL AND OFFICE OF THE COMPLIANCE REVIEW PANEL


Notes: 1. Numbers may not sum precisely because of rounding.2. This allocation does not include administrative overhead.

BudgetItem 2016

Compliance Review Panel 890 683 899 Salaries 268 268 280 Benefits 132 126 134 Relocation 0 0 0Business travel 40 20 35 Administrative expenses 450 269 450

Office of the Compliance Review Panel 556 479 761 Salaries 254 253 298 Benefits 155 162 119 Relocation 0 0 59Consultants 70 28 193 Business travel 60 32 57 Representation 1 0 7Administrative expenses 17 4 29

Total 1,447 1,162 1,660

Budget Actual

2015

6 Appendix 3

ASIAN DEVELOPMENT BANK INDEPENDENT EVALUATION DEPARTMENT


Notes: 1. Numbers may not sum precisely because of rounding.2. This allocation includes administrative overhead only for knowledge and outreach activities.

Item BudgetMidyear Estimate Actual

Budget 2016

Salaries 5,574 5,365 5,299 5,535

Benefits 3,450 3,438 3,218 3,836

Consultants 1,320 1,838 1,650 1,400

Business travel 710 512 378 710

Representation 2 2 1 2

Administrative expenses 180 82 29 160

Total 11,237 11,237 10,575 11,642

2015

Appendix 4 7

ASIAN DEVELOPMENT BANK COMPARISON OF 2016 PROGRAM WITH ACTUAL RESULTS IN 2015 AND 2014

MidyearActual Estimate Actual Program2014 2015 2015 2016

A. Key Outputs1. Investment Operations

Portfolio Management Public sector operations (number) 625 652 645 690 Private sector operations (number) 174 198 180 221 Disbursements ($ million) 10,200 10,929 12,348 11,109

OCR 7,559 a 8,141 9,790 8,252 ADF 2,632 2,615 2,550 2,701

Other grantsb 10 172 7 156

Project Preparation and Processing Public Sector Operations

OCR and ADF project approvals (number)c 104 107 97 118

MFF framework (number) 9 5 3 10

Amount of Approvals ($ million)d11,610 13,864 13,662 12,337

e

OCR 8,519 10,538 10,790 9,924 ADF 3,091 3,325 2,872 2,413

MFF framework ($ million) 3,305 3,593 2,193 6,543

Private Sector OperationsNumber of approvals 24 28 24 f 31

Amount ($ million)g 1,919 2,200 2,626 2,400

2. TA Operations

Active TA projects (number) 1,070 944 965 874 New TA approvals (number) 344 251 270 287 New TA approvals ($ million) 303 300 267 374

3. Knowledge Products and Services (number) 763 2,020 2,224 1,732 Operations departments 427 755 690 556Non-operations departments 336 1,265 1,534 1,176

4. Direct Value Added Cofinancing OperationsInvestment projects (number) 76 64 98 60Investment projects ($ million) 9,093 8,700 10,610 10,500TA projects (number) 111 95 85 60TA projects ($ million) 144 159 125 209

5. Country and Regional Strategies (number)Country partnership strategy 10 4 3 12 Regional cooperation strategy 0 1 1 1 Country or regional operations business plan 37 48 49 40

Item

8 Appendix 4

ADF = Asian Development Fund, MFF = multitranche financing facility, OCR = ordinary capital resources, TA = technical assistance. Notes: 1. Numbers may not sum precisely because of rounding. 2. Midyear estimates for OCR and ADF income for 2015 are based on financial projections as of 30 September

2015, and projections for 2016 are based on financial projections as of 31 December 2015. a Includes loans and equity investment. b Includes operations funded by Other Special Funds such as Climate Change Fund and Asia Pacific Disaster

Recovery Fund. c Projects financed by both ADF and OCR are counted only once. ADF subregional projects with multi-country

coverage are counted only once. d Approval amounts are confined to ADF and OCR financing, which includes loans, equity investments, grants,

and other modalities. These are original amounts excluding cancellations. e Figures include $500 million unallocated OCR regional set aside and $311million unallocated ADF subregional

resources. f Number of nonsovereign approvals is reported and/or counted on a per project basis. One project may consist

of multiple transactions. g Excludes B loans. h Excludes the staff of the Office of the Compliance Review Panel, Independent Evaluation Department, and the

director's advisors, and the support staff of the Board of Directors. i Represents allocable net income for OCR and is defined as operating income after adjustment to loan loss

reserve requirements and appropriation of guarantee fees to the special reserve. j ADF income represents reported net income before (i) net realized gains and/or losses, (ii) unrealized gains

and/or losses, and (iii) grant expenses.

Midyear

Actual Estimate Actual Program2014 2015 2015 2016

B. Borrowings ($ million) 14,223 19,300 18,948 20,600

C. Resources

Authorized Staff Positionsh (number) 2,986 3,012 3,012 3,064

International staff 1,053 1,059 1,059 1,077National and administrative staff 1,933 1,953 1,953 1,987

Internal Administrative Expenses ($ million) 528.4 613.9 538.9 635.6D. Income ($ million) 630.4 309.4 447.2 409.3

OCRi 564.1 254.0 367.7 331.4

ADFj 66.3 55.4 79.5 77.9

Item

Appendix 5 9

ASIAN DEVELOPMENT BANK 2016 BUDGET

DISTRIBUTION OF OPERATIONAL EXPENSES BY DEPARTMENT AND OFFICE ($’000)

… = not available or not calculated, ( ) = negative. Note: Numbers may not sum precisely because of rounding.

Actual 2015

% of Total

Midyear Estimate

2015 Budget

2016 % of Total

% of Increase/

(Decrease)

Department or Office (A) (B) (C) (D) (E) (D/C)

A. President 33,839 8.2 35,815 36,734 7.8 2.6

Offices of Management 9,510 2.3 9,885 10,143 2.1 2.6 Strategy and Policy Department 9,701 2.4 10,414 10,459 2.2 0.4 European Representative Office 1,544 0.4 1,372 1,380 0.3 0.6 Japanese Representative Office 961 0.2 1,253 1,287 0.3 2.7 North American Representative Office 1,281 0.3 1,283 1,323 0.3 3.1 Office of Anticorruption and Integrity 3,815 0.9 4,174 4,245 0.9 1.7 Office of the Auditor General 3,866 0.9 4,102 4,187 0.9 2.1 Office of the Ombudsperson 476 0.1 502 537 0.1 7.0 Office of Public-Private Partnership 2,684 0.7 2,830 3,173 0.7 …

B. 48,178 11.7 55,528 55,235 11.7 (0.5)

Economic Research and Regional Cooperation Department 14,943 3.6 16,329 16,351 3.5 0.1 Department of External Relations 6,875 1.7 7,459 7,571 1.6 1.5 Sustainable Development and Climate Change Department 26,360 6.4 31,740 31,313 6.6 (1.3)

C. Operations 1 99,276 24.2 112,954 116,100 24.6 2.8

Central and West Asia Department 50,600 12.3 55,453 57,045 12.1 2.9 South Asia Department 48,676 11.8 57,501 59,055 12.5 2.7

D. Operations 2 103,601 25.2 115,084 117,365 24.9 2.0

East Asia Department 32,394 7.9 35,960 36,541 7.7 1.6 Pacific Department 18,431 4.5 20,414 20,989 4.4 2.8 Southeast Asia Department 52,777 12.8 58,710 59,835 12.7 1.9

E. Private Sector and Cofinancing Operations 27,817 6.8 31,690 32,750 6.9 3.3

Private Sector Operations Department 24,255 5.9 26,520 27,495 5.8 3.7 Office of Cofinancing Operations 3,562 0.9 5,170 5,255 1.1 1.6

F. Finance and Risk Management 29,876 7.3 32,957 33,499 7.1 1.6

Controller's Department 10,536 2.6 11,772 11,991 2.5 1.9 Office of Risk Management 8,214 2.0 8,988 9,167 1.9 2.0 Treasury Department 11,126 2.7 12,197 12,341 2.6 1.2

G. Administration and Corporate Management 67,398 16.4 75,826 77,068 16.3 1.6

14,908 3.6 19,786 20,047 4.2 1.3 Operations Services and Financial Management Department 13,639 3.3 14,268 14,586 3.1 2.2 Office of Administrative Services 10,936 2.7 11,746 12,008 2.5 2.2 Office of the General Counsel 12,159 3.0 12,256 12,377 2.6 1.0 Office of Information Systems and Technology 11,383 2.8 13,430 13,645 2.9 1.6 Office of the Secretary 4,373 1.1 4,340 4,405 0.9 1.5

H. Unassigned … … 774 646 0.1 (16.5)

Subtotal 409,986 99.8 460,629 469,397 99.5 1.9

I. Young Professionals Program 848 0.2 1,368 2,443 0.5 78.6

Total 410,834 100.0 461,997 471,841 100.0 2.1

Knowledge Management and Sustainable Development

Budget, Personnel and Management Systems Department

Appendix 6

10

ASIAN DEVELOPMENT BANK 2016 BUDGET AND 2015 ACTUAL RESULTS

COMPARISON OF OPERATIONAL EXPENSES BY PROGRAM CATEGORY ($’000)

Note: Numbers may not sum precisely because of rounding. a Includes staff costs (computed based on staff time estimates provided by departments and offices) and other

operational expenses. b Indicative.

Actuala % Budgetb %

Program Category 2015 of Total 2016 of Total

Portfolio management 85,091 20.7 102,175 21.7

Project processing 64,360 15.7 76,720 16.3

Country and regional strategy and programming 22,337 5.4 27,894 5.9

Direct operational support 56,150 13.7 60,503 12.8

Knowledge management 59,167 14.4 66,907 14.2

Operations overhead and support services 123,729 30.1 137,642 29.2

Total 410,834 100.0 471,841 100.0

Appendix 7 11

ASIAN DEVELOPMENT BANK INSTITUTE COMPARISON OF 2016 BUDGET WITH 2015 BUDGET AND ACTUAL RESULTS

($’000)

IAE = internal administrative expenses. Note: Numbers may not sum precisely because of rounding. a Expenses for office occupancy are net of reimbursement of $0.32 million for rental charges received

from the Japanese Representative Office for subleasing office space (i.e., gross rental charges of $2.81 million less reimbursement of $0.32 million for rental charges for sublease = net rental of $2.48 million).

Budget ActualBudget

2016

Item (A) (B) (C)

A. Program Expenses 5,252 3,001 5,285 Research 3,164 1,544 3,164

Capacity building and training 2,088 1,457 2,121

B. Internal Administrative Expenses 6,528 4,847 6,219 Advisory council 95 72 100

Staff costs 6,083 4,434 5,766

Business travel 347 339 350

Representation 3 2 3

C. Administrative Expenses 3,765 3,013 3,692

Office occupancy 2,962 2,481 a 2,900

Depreciation 87 29 87

Office equipment 510 377 500

Contractual services 39 44 45

Library 62 15 62

Communication 63 41 60

Office supplies 20 13 19

Fire insurance 4 3 4

Bank charge 18 10 15

D. Subtotal Before General Contingency (B+C) 10,293 7,860 9,911

E. General Contingency 309 0 500

F. Subtotal IAE Including General Contingency (D+E) 10,602 7,860 10,411

G. Total (A+F) 15,854 10,861 15,696

2015

Appendix 8

12

ASIAN DEVELOPMENT BANK INSTITUTE 2016 BUDGET

DISTRIBUTION OF EXPENSES BY PROGRAM ($’000)

Note: Numbers may not sum precisely because of rounding.

Item Amount %

A. Program Expenses 3,164 2,121 - 5,285 33.7

B.2,295 1,834 2,090 6,219 39.6

Staff cost 2,128 1,641 1,997 5,766 Business travel, representation, and advisory council 167 193 93 453

C. Subtotal (A+B) 5,459 3,955 2,090 11,504 73.3

D. Administrative Expenses 3,692 23.5

E.9,911

F. General Contingency 500 3.2

G. 10,411 66.3

H. Total Expenses (A+G) 15,696 100.0

TotalCapacity Building &

Training

Administration, Management &

CoordinationResearch

Program-Related Internal Administrative Expenses

Total Administrative Expenses Before General Contingency (B+D)

Total Administrative Expenses After General Contingency (E+F)


RESOURCES OF THE ASIAN DEVELOPMENT BANK


1. On 29 April 2009, the Board of Governors adopted the fifth general capital increase (GCI V) of the Asian Development Bank (ADB).1 GCI V was concluded in January 2012 and generated subscriptions from 66 of 67 ADB members with total subscribed shares representing 99.7% of authorized shares. As of 31 December 2015, GCI V subscribed shares were valued at $97.9 billion, bringing ADB’s total subscribed capital to $147.1 billion. The total value of paid-in shares from GCI V was estimated at $3.4 billion,2 which were to be paid in installments up to 2015. As of 31 December 2015, 99.8% of contributions had been received.3 Table 1 shows the capital position of ADB as of 31 December 2015.

Table 1: Capital Position of the Asian Development Bank as of 31 December 2015 ($ million)

a The figure excludes all promissory notes (on-demand and with fixed

encashment schedule) and includes the net notional amounts required to maintain value of currency holdings.

b The sum of the balances in ordinary reserve, special reserve, loan loss reserve, surplus, cumulative revaluation adjustments account, net income after appropriation, and accumulated other comprehensive loss.

Source: ADB. 2015. Management’s Discussion and Analysis and Annual Financial Statements. 31 December 2015. Manila.

2. ADB’s total lending capacity is limited by three financial constraints: (i) the lending limitation in the Agreement Establishing the Asian Development Bank (the Charter)4 and lending limitation policy5 (ii) the borrowing limitation policy,6 and (iii) the long-term capital adequacy requirement.7 1 ADB. 2009. The Fifth General Capital Increase of the Asian Development Bank. Manila. 2 Based on the historical United States dollar–special drawing right exchange rate of $1.20635. 3 As of 15 March 2016, ADB had received 100% of contributions, subject to the pending approval by the Board of

Directors of the remaining contribution. 4 ADB. 1966. Agreement Establishing the Asian Development Bank. Manila. Article 12.1 of the Charter provides that

“[t]he total amount outstanding of loans, equity investments and guarantees made by the Bank in its ordinary operations shall not at any time exceed the total amount of its unimpaired subscribed capital, reserves and surplus included in its ordinary capital resources, exclusive of the special reserve provided for by Article 17 of this Agreement and other reserves not available for ordinary operations.”

5 ADB. 2008. Review of the Asian Development Bank’s Lending Limitation. Manila. ADB’s lending limitation policy limits its total amount of disbursed loans, disbursed equity investments and related prudential buffer, and the

Capital Subscription(A)

Paid-In

Capitala

(B)Reservesb

(C)

Total Capital and Reserves

(D = B + C)147,052 4,817 12,629 17,446

2

3. Lending and borrowing headroom are important indicators of ADB’s future lending and borrowing capacity. Table 2 shows the lending and borrowing headroom as of 31 December 2015, based on ADB’s total lending and borrowing authority. ADB is expected to have sufficient lending and borrowing headroom over the medium term.

Table 2: Lending and Borrowing Headroom as of 31 December 2015 ($ billion)

Source: Asian Development Bank.

4. ADB’s lending capacity is constrained by the long-term capital adequacy requirement (footnote 7), rather than the lending and borrowing limitations. Under ADB’s current long-term capital adequacy framework, the minimum equity-to-loan ratio (ELR) is set at 25%. Table 3 lists the components of the ELR as of 31 December 2015.

Table 3: Equity-to-Loan Ratio Components as of 31 December 2015

ELR = equity-to-loan ratio. Notes: 1. Usable equity is the sum of usable paid-in capital, ordinary reserve, special reserve,

and surplus. 2. Loans and guarantees is the sum of net outstanding loans and present value of

guarantees (net of amounts guaranteed, insured, or reinsured by highly creditworthy counterparties), less cumulative loan loss reserves and provisions.

3. Based on notes 1 and 2 above, the numbers related to equity, loans, and guarantees may not reconcile with the numbers in Tables 1 and 2.

Source: Asian Development Bank.

maximum amount that can be demanded from ADB under its guarantee portfolio to no more than the sum of ADB’s unimpaired subscribed capital and reserves (including surplus but excluding special reserve). Lending headroom is the excess of this lending authority over ADB’s total amount of disbursed loans, disbursed equity investments and related prudential buffer, and the maximum amount that can be demanded for guarantees in any given year.

6 ADB. 2008. Review of the Asian Development Bank’s Lending Limitation. Manila. The policy limits gross outstanding borrowings to no more than the sum of the callable capital of nonborrowing members, paid-in capital, and reserves (including surplus).

7 ADB. 2008. The Asian Development Bank’s Long-Term Capital Adequacy Framework. Manila (updated based on ADB. 2012. Risk Management Report: Second Quarter 2012. Manila).

Headroom

A. Lending Headroom (A1 – A2) 96.1

1. Lending authority 159.1

2. Outstanding loans, callable guarantees, 63.0

and equity investments committed

3. Utilization of lending authority (A2/A1) 40%

B. Borrowing Headroom (B1 – B2) 43.8

1. Borrowing authority 112.8

2. Outstanding borrowings 69.0

3. Utilization of borrowing authority (B2/B1) 61%

Actual2015

ItemUsable Equity

($ million)Loans and Guarantees

($ million)ELR(%)

ELR Components 17,330 62,349 27.8

3

5. In April 2015, ADB’s Board of Governors approved the proposal to combine Asian Development Fund lending operations with the ordinary capital resources balance sheet.8 This combination will become effective on 1 January 2017 and will almost triple ADB’s equity base to about $50 billion, while increasing the ELR from 27.8% at the end of 2015 to 51.4% in January 2017. The expanded resources will allow ADB to increase support to poor DMCs, enhance its risk-bearing capacity and support for private sector operations, and strengthen its preparedness for any future economic crises or natural disasters. 6. The Board of Directors will continue to carefully monitor ADB’s resource position to ensure that ADB remains a relevant and responsive institution in the region, and that its resources are managed in the most effective and efficient manner.

8 ADB. 2015. Enhancing ADB’s Financial Capacity for Reducing Poverty in Asia and the Pacific. Manila.


REVIEW OF RULES AND REGULATIONS


AMENDMENT TO THE REGULATIONS OF THE ASIAN DEVELOPMENT FUND

1. The Board of Directors approved amendments to the preamble and provisions of theRegulations of the Asian Development Fund relating to the valuation of currencies held in AsianDevelopment Fund. Such amendments to the Regulations of the Asian Development Fund willtake effect on 1 January 2017 subject to the adoption by the Board of Governors of a resolutionauthorizing the conversion of Asian Development Fund (ADF) resources into United Statesdollars.

2. The Regulations of the Asian Development Bank with revisions highlighted are attachedhereto as Appendix.

Appendix 2

REGULATIONS OF THE ASIAN DEVELOPMENT FUND

DATED [1 JANUARY 2017]

The ASIAN DEVELOPMENT BANK (hereinafter called ADB) is empowered by its Articles of Agreement (hereinafter called the Articles) to establish and administer Special Funds and to carry out special operations financed from such Funds;

The Board of Governors of ADB, by Resolution No. 62, has authorized the

establishment of a Special Fund to be known as the ASIAN DEVELOPMENT FUND (hereinafter called the Fund), intending that the Fund serve as an instrument for carrying out the concessional lending operations of ADB;

The Board of Governors, by Resolution No. 67 and Resolution No. 68, has

approved arrangements for the establishment of the Fund and for the initial mobilization of resources in the form of contributions from developed member countries of ADB, and has directed the Board of Directors of ADB to make Regulations to govern the Fund and the administration of its resources;

The Board of Governors has from time to time adopted resolutions authorizing

replenishments of the Fund, subject to the terms and conditions contained in the relevant authorizing Resolutions;

The Board of Governors has authorized ADB to provide, in addition to loans,

financing in the form of grants; The Board of Governors has authorized ADB, in accordance with such

determinations as may be made by the Board of Directors, (i) to convert Fund resources held in various currencies into the currencies which constitute the Special Drawing Right (SDR), and (ii) to determine in case of the withdrawal of a Contributor from the Fund or the termination of the Fund, the value of Contributors’ paid-in contributions and the value of all other resources of the Fund, including net income and surplus from ADB’s ordinary capital resources transferred to the Fund, in terms of SDR;

The Board of Governors, by Resolution No. [ ]372, has authorized ADB to

terminate the loan operations of the Fund, and to transfer the loan and certain other assets of the Fund to ADB’s ordinary capital resources. The Board of Governors has authorized ADB to provide financing from the Fund solely in the form of grants; and

The Board of Governors, by Resolution No. [ ], has authorized ADB, in

accordance with such determinations as may be made by the Board of Directors, to convert Fund resources held in the currencies that constitute the SDR and other currencies into United States dollars; and

The Board of Directors, pursuant to the foregoing authority, has adopted the

following Regulations for the administration of the Fund and the resources thereof.

3

ARTICLE I: THE FUND

Section 1.01. Purpose of the Fund The purpose of the Fund shall be to enable ADB more effectively to carry out its

purpose and functions by providing resources on concessional terms for the economic and social development of the developing member countries of ADB, having due regard to the economic situation of such countries and to the needs of the less developed members. Section 1.02. Application of Regulations

(a) The Fund and the resources thereof shall be governed by, and such resources shall be received, administered, used and disposed of in accordance with, these Regulations, as amended from time to time pursuant to Section 6.01, unless the relevant authorizing Resolution of the Board of Governors provides otherwise.

(b) The Special Funds Rules and Regulations adopted by the Board of

Directors on 17 September 1968 shall not apply to the Fund or the resources thereof. (c) For purposes of these Regulations, a Special Resolution of the Board of

Directors is a resolution which is approved by a majority of Directors, representing not less than two-thirds of the total voting power of the members of ADB. Section 1.03. Administration of the Fund

(a) Subject to the express provisions of these Regulations, the respective functions of the Board of Governors, the Board of Directors, the President and the staff of ADB in carrying out the responsibilities and exercising the powers of ADB with respect to the Fund, and the procedures to be followed in the exercise of such functions, shall be the same as those which apply in similar circumstances in the ordinary operations of ADB.

(b) The Board of Directors may adopt such guidelines and operating

procedures, not inconsistent with these Regulations, as it shall consider necessary or appropriate for the efficient administration of the Fund.

ARTICLE II: RESOURCES OF THE FUND

Section 2.01. Types of Resources

The resources of the Fund shall consist of: (a) amounts contributed to the Fund as provided in Section 2.02 and Section

2.04; (b) amounts accepted by ADB for the Fund as provided in Section 2.05; (c) amounts initially allocated to other Special Funds of ADB and transferred

to the Fund (other than set-aside resources);

Appendix 4

(d) amounts accruing to the Fund by way of income or otherwise derived from operations of the Fund; and

(e) amounts transferred from ordinary capital resources net income or

surplus with the approval of the Board of Governors, as provided in Section 2.06.

Section 2.02. Contributions

(a) Any member of ADB may become a Contributor to the Fund by making a Contribution in such amount as may be specified by an authorizing Resolution of the Board of Governors; provided that no member shall be obligated by reason of such authorizing Resolution to make a Contribution.

(b) Each Contribution shall be made by the member depositing with ADB, in

conformity with the relevant authorizing Resolution, an Instrument of Contribution specifying the amount of its Contribution, the manner in which payment thereof will be made to ADB, and such other matters as may be required or permitted by the authorizing Resolution.

(c) By depositing an Instrument of Contribution, the member shall be deemed

to accept the application of these Regulations to the resources contributed under such Instrument. Section 2.03. Payment of Contributions

Except as the Board of Governors in the authorizing Resolution may otherwise determine, each Contribution shall be paid in the currency of the Contributor, and shall be made available to ADB, at the option of the Contributor, either in cash or in notes or similar obligations issued by the Contributor or by the depository of the Contributor designated pursuant to Article 38, paragraph 2, of the Articles. Such notes or obligations shall be non-negotiable, non-interest-bearing and encashable by ADB at par upon demand, as required by ADB for the conduct of the operations of the Fund and to meet liabilities of the Fund.

Section 2.04. Increases in Contributions

(a) A Contributor may at any time, by agreement with ADB, increase the amount of its Contribution.

(b) The Board of Directors shall at appropriate intervals review the resource

position of the Fund. If on the basis of such review it appears that a general increase in the amount of Contributions is warranted, the Board of Directors shall make recommendations to the Board of Governors, which may authorize such a general increase upon such terms and conditions as it shall determine.

(c) Except as the Board of Governors in authorizing a general increase under

paragraph (b) of this Section 2.04 may otherwise determine, the provisions of the Regulations relating to Contributions shall apply equally to increased amounts contributed as contemplated by this Section 2.04.

Appendix 5

Section 2.05. Supplementary Resources

(a) ADB, with the approval of the Board of Directors, may accept Supplementary Resources for the Fund from any member of ADB and, if authorized by a Special Resolution of the Board of Directors, from any non-member government or from any national or international entity, public or private.

(b) Supplementary Resources shall normally be accepted only in a freely

convertible currency. Where the donor of such Resources is a government, however, the Board of Directors may agree to accept such Resources in the currency of the donor even if this is not freely convertible, provided that satisfactory assurances are received concerning the application of such Resources of the principles laid down in Section 4.02.

(c) Notwithstanding the provisions of paragraph (b) of Section 4.03,

Supplementary Resources accepted from a non-member may be used to finance procurement, in the territories of the donor of such Resources and of all member countries of ADB, of goods produced in and services supplied from such territories.

(d) The other terms and conditions governing ADB's administration and use

of Supplementary Resources shall be consistent with the provisions of these Regulations relating generally to resources of the Fund. For the purposes of Section 5.01, Section 5.03 and Section 6.02, the term "Contributor" shall be deemed to include a donor of Supplementary Resources, and the term "Contribution" shall be deemed to include Supplementary Resources donated by such donor. Section 2.06. Income and Surplus from Ordinary Capital Resources

After making provision for reserves pursuant to the Articles, the Board of

Governors may transfer to the Fund net income or surplus from ordinary capital resources. The net income and surplus so transferred shall be used in such manner, not inconsistent with these Regulations, as the Board of Governors in making such resources available to the Fund may direct.

ARTICLE III: OPERATIONS OF THE FUND

Section 3.01. Methods of Operations

(a) The resources of the Fund may be used by ADB, alone or in combination with any other Special Funds resources of ADB, to provide financing under grants for projects and programs of high developmental priority. The term "project" as hereinafter used refers equally to a program.

(b) Grants shall be provided principally for specific projects, including those

forming part of a national, sub-regional, or regional development program. ADB may also make grants to national development banks and other suitable entities, in order that these entities may finance specific development projects whose individual financing requirements are not, in the opinion of ADB, large enough to warrant the direct supervision of ADB.

Appendix 6

(c) Subject to the provisions of these Regulations, the policies and procedures to be applied by ADB in making grants financed from the Fund shall be determined by the Board of Directors, giving particular recognition to the special responsibility of ADB to assist the less developed of its developing member countries. Section 3.02. Eligible Recipients

Financing may be provided, in accordance with these Regulations, to developing

members of ADB, to any agency, instrumentality or political subdivision of a developing member, or to any entity or enterprise operating in the territory of such a member, as well as to any international, regional or subregional agency or entity concerned with development in the region served by ADB. Section 3.03. Commitment Authority

ADB shall make grant commitments from its resources pursuant to Section 2.01,

including commitments based on amounts projected to be received by the Fund as investment income, pursuant to such procedures in respect of such commitment authority as the Board of Directors may authorize from time to time. Section 3.04. Considerations Precedent to Financing

(a) Before any grant is made, the applicant shall have submitted an adequate proposal and the President shall have presented to the Board of Directors a written report concerning the proposal, together with his recommendations, on the basis of a staff study.

(b) In considering an application for a grant to be financed from the Fund,

ADB shall pay due regard

(i) to the ability of the recipient to obtain other financing, including financing from other sources of ADB, on terms and conditions which ADB considers reasonable for the recipient, taking into account all pertinent factors;

(ii) to the relevant self-help measures being taken by the recipient

and, where the recipient is not a member of ADB, by both the recipient and the member in whose territory the project is to be carried out; and

(iii) to the desirability of avoiding a disproportionate amount of the resources of the Fund being used for the benefit of any particular developing member of ADB.

(c) ADB shall not make a grant unless it is satisfied that the project for which

such grant is intended is sound, and that financing the project would thus be consistent with the requirement that ADB shall be guided by sound development banking principles in its operations.

Appendix 7

(d) ADB shall not finance any undertaking in the territory of a member of ADB

if that member objects to such financing. Section 3.05. Use of Grant Proceeds

(a) The proceeds of a grant financed from the Fund shall be drawn upon by the recipient only to meet expenditures in connection with the project as such expenditures are actually incurred; provided that the Board of Directors may decide, in special circumstances, that some reasonable portion of such proceeds may be drawn upon to reimburse past expenditures.

(b) ADB shall take the necessary measures to ensure that the proceeds of each grant are used only for the purposes for which the grant operation was undertaken, and with due attention to considerations of economy and efficiency. Section 3.06. Provision of Currencies

In making grants financed from the Fund, ADB shall furnish its grant recipients

with United States dollars, unless the Board of Directors may otherwise determine. Section 3.07. Procurement Arrangements

Procurement arrangements and procedures to be followed by grant recipients shall be determined by the Board of Directors from time to time, having regard in particular to the availability of Contributions for financing such procurement.

ARTICLE IV: ADMINISTRATION AND USE OF RESOURCES OF THE FUND

Section 4.01. Separation of Operations

(a) The resources of the Fund shall at all times and in all respects be held, used, committed, invested or otherwise disposed of entirely separate from the ordinary capital resources of ADB.

(b) Under no circumstances shall the ordinary capital resources of ADB be

charged with, or used to discharge, losses or liabilities arising out of the operations or other activities for which resources of the Fund were originally used or committed.

(c) No action authorized by the Board of Governors or the Board of Directors

in application of Article 10 of the Articles shall be deemed to contravene the provisions of paragraphs (a) or (b) of this Section 4.01. Section 4.02. Freedom of Resources from Restrictions

Except as otherwise provided in or permitted by these Regulations, (a) the resources of the Fund shall be freely available for use by ADB in the

Appendix 8

conduct of the operations of the Fund and to meet liabilities of the Fund; and (b) currencies paid into the Fund may be used by ADB, without restriction, for

payments in any country and to purchase other currencies as required for the conduct of the operations of the Fund and to meet liabilities of the Fund. Section 4.03. Use of Resources for Financing Procurement

ADB may draw upon resources of the Fund to finance procurement expenditures

under grants in accordance with the following principles: (a) ADB may (i) draw down Contributions to finance expenditures in the

territories of all Contributors and of all developing member countries of ADB, for goods produced in and services supplied from such territories, and (ii) use other resources of the Fund to finance expenditures in the territories of all member countries of ADB, for goods produced in and services supplied from such territories, except in any case in which the Board of Directors, by a vote of the Directors representing not less than two-thirds of the total voting power of the members of ADB, determines to permit procurement in other countries or of goods and services produced in other countries, in special circumstances making such procurement appropriate, provided, that any blanket permission for such procurement may apply only to cofinanced operations; and

(b) all resources of the Fund shall be available, without restriction, to finance

transportation and insurance costs associated with the procurement of goods and services. Section 4.04. Drawdown of Contributions

As far as practicable, ADB shall draw upon Contributions in such a manner that,

over reasonable periods of time, the proportion of all Contributions drawn down, shall be uniform, regardless of whether such Contributions are made available to ADB in cash or in notes. Section 4.05. Investment

ADB may invest any resources of the Fund which are not immediately required for the conduct of the operations of the Fund or to meet liabilities of the Fund. Except as otherwise authorized by the Board of Directors, such investment shall be made in accordance with the guidelines approved by the Board of Directors for investment of the ordinary capital resources of ADB, except that Supplementary Resources accepted in the currency of a non-member may be invested in the territories of such non-member. Section 4.06. Charging of Administrative Expenses

The Fund shall bear all administrative expenses appertaining directly to operations financed from the resources of the Fund, and such reasonable share of the other administrative expenses of ADB as the Board of Directors shall from time to time determine. Such expenses shall be charged first to the income of the Fund.

Appendix 9

Section 4.07. Allocation of Net Income

Net income accruing on the resources of the Fund shall be retained in the Fund; provided that, if authorized by the Board of Governors, a portion of such net income accruing in any year may be transferred from the Fund and applied towards financing the cost of technical assistance provided by ADB on a grant basis. Section 4.08. Valuation of Currencies

Whenever it shall be necessary to determine the value of the SDR United States

dollar in terms of any currency or the value of any currency in terms of the SDRUnited States dollar or another currency, the valuation shall be reasonably made by ADB, applying as far as practicable the principles applicable to valuation of currencies forming part of the ordinary capital resources of ADB.

Section 4.09. Accounts and Audit

(a) ADB shall maintain accounts of the Fund in accordance with generally accepted sound accounting principles, and shall prepare and submit to the Board of Directors financial statements of the Fund on a quarterly basis.

(b) The accounts of the Fund shall be audited at the close of each financial

year by the outside auditors of ADB, and shall be subject to the same audit requirements by internal and outside auditors of ADB as apply to the accounts of ADB's ordinary capital resources.

(c) The Board of Directors shall submit to the Board of Governors, for

approval at the Annual Meeting of Governors, the audited financial statements of the Fund for the previous financial year, including a balance sheet and a statement of revenue and expenses. Section 4.10. Reports

(a) ADB shall include in its Annual Reports a separate section in respect of the Fund, containing appropriate information on the resources of the Fund and on projects financed from the Fund.

(b) ADB shall report periodically to each Contributor on the current status and

anticipated use of its Contribution, and shall provide such other information regarding its administration of the Contribution as the Contributor may reasonably request.

ARTICLE V: WITHDRAWAL AND TERMINATION

Section 5.01. Withdrawal

(a) A Contributor may at any time, after consultation with ADB, withdraw from the Fund by delivering a written withdrawal notice to ADB at its principal office. Withdrawal shall

Appendix 10

become effective at the end of the calendar quarter following the quarter in which the withdrawal notice is received by ADB, or on such later quarterly date as may be specified in such notice. As used in this Section, the term “date of withdrawal” means the date on which the withdrawal becomes effective.

(b) As from the date of withdrawal, the Contributor shall have no rights under these Regulations except those set forth in this Section 5.01 and in Section 6.02, and shall be relieved of any further liability to pay to ADB any amounts of its Contribution not paid in at the date of withdrawal except such amounts as, in the opinion of ADB, will be required to meet commitments under grants made by ADB as of that date.

(c) Upon withdrawal, ADB shall proceed to a settlement of accounts with the

Contributor on the basis of the following principles:

(i) As used in the following sub-paragraphs, the term "existing grants" means grants made by ADB from resources of the Fund as of the date of withdrawal; the term "total net assets" means total net assets of the Fund as shown in the books of ADB as of the date of withdrawal; and the term "surplus assets" means such part of the total net assets as, in the opinion of ADB, will not be required to meet commitments under existing grants. For the purpose of this Article V, and except as otherwise specified in the Regulations, the value of total net assets and surplus assets shall be determined in SDR in accordance with the exchange rates used by ADB for translation purposes in its books of account on the date of withdrawal.

(ii) For the purposes of this Article V, the value of any paid-in

Contribution shall be the equivalent in terms of SDR of the amount paid-in by a Contributor, determined in accordance with the exchange rates set forth in the relevant authorizing Resolution of the Board of Governors, except that for Contributions made pursuant to Resolutions Nos. 67, 68, 92 and 121 of the Board of Governors and the amendments thereto, the value of the Contributor’s Contribution shall be calculated based on an exchange rate of SDR1.20635 per United States dollar of the weight and fineness in effect on 31 January 1966, as used by ADB for the valuation of its capital in accordance with Article 4, paragraph 1, of the Articles.

(iii) For the purposes of this Article V, the value of net income and

surplus from ordinary capital resources transferred to the Fund shall be the equivalent in terms of SDR of the amounts transferred to the Fund, determined on the basis on the exchange rates used by ADB for translation purposes in its books of account at the time when the relevant Resolution authorizing such transfer was adopted.

Appendix 11

(iv) ADB shall determine the Contributor's share in the Fund, the

amount of which shall be such proportion of the total net assets, after deducting accruals, as the paid-in amount of the Contributor's Contribution at the date of withdrawal bears to the aggregate amount of all paid-in Contributions and net income and surplus from ordinary capital resources transferred to the Fund; provided that if the Contributor's Contribution comprises or includes capital transferred from the Multi-Purpose Special Fund as contemplated in Section 7.03, the Contributor may, in special circumstances relating to the terms on which such capital was originally made available to the Multi-Purpose Special Fund, require that its share be increased by not more than an amount bearing the same proportion to the total of (A) all accumulated net income retained in the Fund and (B) any portions of net income transferred from the Fund pursuant to Section 4.07, as the capital so transferred bears to the aggregate amount of all paid-in Contributions.

(v) A portion of the Contributor's share bearing the same proportion to the whole as the amount of the surplus assets bears to the total net assets shall be paid by ADB to the Contributor, within a reasonable time after withdrawal, from the surplus assets. In making such payment, ADB shall draw first upon such of the surplus assets as have been paid into the Fund (in cash or in notes) by the Contributor.

(vi) The balance of the Contributor's share shall be paid by ADB to the

Contributor, in installments not more frequent than every six months, from amounts allocated by ADB for the purpose from cancellations occurring under existing grants after the date of withdrawal.

(vii) In no event shall total payments made to the Contributor

hereunder exceed the equivalent in terms of SDR of the total amount paid into the Fund by the Contributor, calculated in accordance with the exchange rates used by ADB for translation purposes in its books of account on the date of withdrawal, except to the extent and in the circumstances contemplated in the proviso in sub-paragraph (iv) above.

(d) All calculations, determinations and allocations required for purposes of

paragraph (c) of this Section 5.01 shall be made on such basis, consistent with the principles set out in that paragraph, as ADB shall reasonably determine. Section 5.02. Termination (a) The Board of Governors may, after consultation between ADB and the Contributors, decide to terminate the Fund.

Appendix 12

(b) The Fund shall terminate automatically upon termination by ADB of its

operations pursuant to Article 45 of the Articles. Section 5.03. Disposal of Resources on Termination

Upon termination of the Fund, the following provisions shall apply with respect to

the resources of the Fund: (a) ADB shall forthwith cease all activities relating to such resources, except

those incident to the orderly realization, conservation and preservation of such resources and the settlement of the direct or contingent obligations to which they may be subject.

(b) Subject to paragraph (c) of this Section 5.03, ADB shall distribute the net

assets of the Fund among Contributors and ADB in proportion to the amounts respectively made available by them to the Fund as Contributions, and as net income and surplus from ordinary capital resources transferred to the Fund. Such distribution shall be effected at such times, in such currencies and in such types of assets as ADB shall deem fair and equitable. Distribution need not be uniform as to type of asset or as to currency.

(c) No distribution shall be made until all liabilities to creditors (including

liabilities to ADB in respect of administrative expenses) shall have been discharged or provided for, and until the Board of Directors shall have decided that such distribution should be made; provided that a Contributor whose Contribution comprises or includes capital transferred from the Multi-Purpose Special Fund may, in special circumstances relating to the terms on which such capital was originally made available to the Multi-Purpose Special Fund, require that the amount to be distributed to it in respect of that part of its Contribution be determined as if the net assets of the Fund included net income transferred from the Fund pursuant to Section 4.07, and the amounts of all other distributions shall be adjusted accordingly. Any distribution to a Contributor shall be subject to prior settlement of all outstanding claims by ADB against such Contributor in respect of its Contribution.

(d) Until final distribution of the assets of the Fund, all rights and obligations

of ADB and of Contributors under these Regulations shall continue unimpaired, except that no Contributor may withdraw after the date of termination.

ARTICLE VI: AMENDMENTS; ARBITRATION

Section 6.01. Amendments

These Regulations may be amended, after consultation between ADB and the Contributors, by Special Resolution of the Board of Directors; provided that the prior consent in writing of every Contributor shall be required before the coming into effect of any amendment modifying

(a) the provisions of Section 3.01(a), which specify the manner in which ADB

may use the resources of the Fund in its operations;

(b) the provisions on use and drawdown of Contributions contained in

Appendix 13

Section 4.03 and Section 4.04; (c) the provisions on charging of administrative expenses contained in

Section 4.06; (d) the rights of a Contributor upon withdrawal from the Fund under Section

5.01, and upon termination of the Fund under Section 5.03; and (e) the arbitration procedure provided in Section 6.02.

Section 6.02. Arbitration

If a dispute outside the scope of Article 60 of the Articles should arise between ADB and a Contributor concerning any matter arising out of or in connection with the Contribution of that Contributor, and such dispute cannot be settled by consultation between the parties, the dispute shall be submitted to arbitration by a tribunal of three arbitrators. One of the arbitrators shall be appointed by ADB, another by the Contributor, and the third, unless the parties otherwise agree, by the President of the International Court of Justice, or such other authority as may have been prescribed by regulations adopted by the Board of Governors for the purposes of Article 61 of the Articles. A majority vote of the arbitrators shall be sufficient to reach a decision which shall be final and binding upon the parties. The third arbitrator shall be empowered to settle all questions of procedure in any case where the parties are in disagreement with respect thereto.

ARTICLE VII: EFFECTIVENESS; TRANSITIONAL PROVISIONS

Section 7.01. Effectiveness of Regulations

These Regulations shall become effective forthwith upon the establishment of the Fund. Section 7.02. Application of Preceding Governors' Resolutions

(a) For purposes of these Regulations, Resolution No. 67 and Resolution No. 68 of the Board of Governors shall be deemed to be Resolutions contemplated by Section 2.02 and Section 2.04, respectively.

(b) Notwithstanding the provisions of Section 4.03, the Board of Directors,

acting under the authority of Resolution No. 67, may accept a procurement restriction upon the initial use of part or all of a Contribution made as contemplated in such Resolution. If the whole of a Contribution, or the balance thereof remaining unused at any time, is subject to such restriction, the concerned Contributor shall not be deemed to be a Contributor for the purposes of paragraph (a) of Section 4.03. Any such restriction shall be subject to periodic review by, and consultation with, ADB. Section 7.03. Transfers from Multi-Purpose Fund

(a) ADB shall transfer to the Fund, pursuant to the provisions of paragraph 8

Appendix 14

of Resolution No. 67 of the Board of Governors, amounts initially contributed to the Multi-Purpose Special Fund of ADB which have been the subject of a crediting declaration as provided in such paragraph.

(b) ADB may arrange for other amounts contributed to the Multi-Purpose

Special Fund to be reallocated and transferred to the Fund as soon as possible after its establishment. Amounts so reallocated shall be consolidated with and accounted for as part of the Contribution (if any) made by the same Contributor to the Fund, and otherwise shall be deemed to be Supplementary Resources until such time as the Contributor makes its initial Contribution to the Fund.

(c) As from the date of transfer, all amounts transferred as contemplated in this Section shall constitute or form part of Contributions or Supplementary Resources under these Regulations as the case may be, and the use, administration and disposition of such amounts shall be governed by these Regulations accordingly. Liabilities to which such amounts were subject at the date of transfer shall become liabilities of the Fund.

RESOLUTIONS ADOPTED AT THE MEETING

RESOLUTION NO. 379


The Board of Governors Having reviewed the Independent Auditors’ Report on the Financial Statements and Management's Report on Internal Control over Financial Reporting of ADB for 2015 RESOLVES: That the audited Financial Statements as contained in the Annual Report of ADB for 2015, which include separate financial statements for the operations of Special Funds, are approved.

Adopted on 4 May 2016

RESOLUTION NO. 380

ALLOCATION OF NET INCOME The Board of Governors Having considered the Report of the Board of Directors on the allocation of the net income of ADB's ordinary capital resources and the Asian Development Fund for the year ended 31 December 2015 RESOLVES:

That, of the net income of ADB from its ordinary capital resources for the year ended 31 December 2015 amounting to $537,135,424, after appropriation of guarantee fees of $19,028,432 to the Special Reserve,

(a) $43,300,000 representing the adjustment to the loan loss reserve as of 31 December 2015, be added from the loan loss reserve to the net income;

(b) $212,744,834 representing the ASC 815/825 adjustments and the unrealized portion of net income from equity investments accounted for under the equity method, for the year ended 31 December 2015, be added to the Cumulative Revaluation Adjustments account;

(c) $207,690,590 be allocated to Ordinary Reserve;

(d) $120,000,000 be allocated to the Asian Development Fund; and

(e) $40,000,000 be allocated to the Technical Assistance Special Fund.

Adopted on 4 May 2016

GOVERNORS' STATEMENTS

©Photothek/BMZ

First Business Session Second Business Session (Wednesday, 4 May 2016, 9:00 a.m. - 12:00 noon) (Thursday, 5 May 2016, 11:00 a.m. - 12:00 noon)

Germany (Chair)1 Japan 1 Luxembourg2 Korea, Republic of 2 Afghanistan3 China, People's Republic ofa 3 Bhutan4 United States 4 Spain5 Australia 5 Myanmar6 Indonesia 6 Turkmenistan7 New Zealand8 Malaysia9 India10 Uzbekistan11 Pacific developing member countriesb

12 Pakistan13 Azerbaijan14 Philippines15 Italy16 Thailand17 France18 Bangladesh19 Switzerland20 Armenia21 Canada22 Cambodia23 Sri Lanka24 Portugal25 Maldives26 Taipei,China27 Turkey

a

b

With simultaneous interpretation.

GOVERNORS' STATEMENTS: ORDER OF SPEAKING

Note: The following ADB members have indicated they will not deliver but will submit written statements: Austria, Belgium; Brunei Darussalam; Georgia; Hong Kong, China; Ireland; Kazakhstan; Kyrgyz Republic; Lao People's Democratic Republic; Mongolia; Nepal; Netherlands; Nordic members (Denmark, Finland, Norway, Sweden); Singapore; Tajikistan; United Kingdom; and Viet Nam.

Cook Islands, Fiji, Kiribati, Marshall Islands, Federated States of Micronesia, Nauru, Palau, Papua New Guinea, Samoa, Solomon Islands, Timor-Leste, Tonga, Tuvalu, and Vanuatu. A joint statement will be delivered by the Governor for Cook Islands.

AFGHANISTAN Ameen Habibi, Temporary Alternate Governor

Mr. Chairman, President Nakao, Honorable Governors, Distinguished officials,

On behalf of the government of Afghanistan let me begin by thanking the government of Germany for the warm welcome and generous hospitality on the occasion of the 49th Annual Meeting of ADB in Frankfurt.

I would also like to compliment President Nakao and his team for excellent preparations and arrangements for this Annual Meeting. We also fully support the reelection of President Nakao as his leadership has proven to be important for taking reforms forward and achieving developmental results in the Asia and the Pacific.

In the meantime, I would like to take this opportunity to thank ADB for their generous support of more than 4 billion in grant since 2002 for the reconstruction and development of Afghanistan.

We are also thankful to ADB and ADF donors in extending our exceptional post-conflict status from 2018 to 2020 under which ADB will provide grants from ADF 12 window to Afghanistan for the period of 2017- 2020.

Excellencies,

The Afghanistan National Unity government came to power in 2014 with a strong reform agenda. In this regard it has made significant progress on reforming the civil service, public service delivery, enacting business friendly laws and becoming a WTO member. In particular, as a result of reforms to both revenue collection and expenditure, the fiscal position has improved significantly over the last year. Domestic revenues increased to 10.4 percent of GDP in 2015, higher than the figure of 8.7 percent recorded in 2014. Further, Afghan security forces have shown resilience in the face of intensified attacks on our people and our democratic institutions after the withdrawal of international forces.

In addition, the government is continuing to put in place building blocks for long-term economic development and improvement which also encompasses regional connectivity and integration.

Despite all these major progresses, the government of Afghanistan is facing some daunting political, economic and security challenges to overcome in the coming years. To mention some, it is currently facing a lower economic growth, increasing insecurity that hamper private sector

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confidence, foreign direct investment, and overall public service delivery, which together contribute to higher poverty rates, which currently stands at 39.1 percent.

Because of a contracting economy, an intensifying insurgency, significant medium-term financial demand, the current GDP growth remains at 2 percent. However, GDP growth is projected to accelerate in 2017 to 3 percent assuming that security conditions do not worsen and planned donor support holds firm. In such a scenario, in order for the economy to transition to a sustainable path, there is a dire need for continuous support.

Excellencies

Despite revenue increase recently, our budget still continues to be heavily dependent on foreign aid. Afghanistan will continue to need stronger financial and technical support of our development partners in the coming years. The support will allow the Afghan government to sustain the hard-won previous achievements and implement reforms.

Here I would specifically mention stronger support of ADB which is one of the largest on-budget supporters to Afghanistan.

Presently, ADB is engaged in infrastructure, transport, energy, agriculture and natural resources in Afghanistan. Being a pioneer in infrastructure development, we believe that ADB is in a position not only to connect our region through investing in infrastructure but also bringing people from Asia and beyond closer which is key to address enormous challenges we all face in the 21st century in the spirit of connectivity and togetherness.

ADB’s current Country Operations Business Plan (COBP) 2016 - 2018 for Afghanistan, which is a three year plan, continues to focus on energy, transport, agriculture and natural resources which will promote inclusive economic growth, regional integration, governance, and capacity development.

Excellencies,

In conclusion, we believe that a peaceful, stable and developed Afghanistan is in the interest of our neighboring countries as well as the whole region.

Next, as for regional cooperation, we strongly believe in the economic integration as the future of Afghanistan depends on the prospects of economic integration in the region. Afghanistan can play a key role as a land bridge for transit, trade and connectivity.

Further, we are looking forward to a successful International Conference on Afghanistan scheduled for October 4 and 5 later this year in Brussels.

Once again I thank the Government of Germany and ADB for organizing this Annual Meeting in the very beautiful city of Frankfurt.

Thank you.

ARMENIA Vache Gabrielyan, Governor

Dear Mr. Chairman, Dear Mr. President, Distinguished Governors and Delegates, Ladies and Gentlemen,

I am pleased to be here today at the 49th Annual Meeting of the Asian Development Bank and issue a statement on behalf of the Republic of Armenia. I would like to commend ADB's Management for organizing this important annual gathering and to the Government of Germany for hosting this event. ADB annual meetings serve as an important platform for the member countries to share their successes, challenges and best practices, to discuss the policy priorities for the upcoming years and have a perspective on global developments.

Since December 2014, Armenia faces significant economic headwinds due to regional economic developments. Despite significant strains induced by massive devaluation and economic slowdown in our main economic partner, the Russian Federation, our economy showed notable resilience and we recorded a growth of 3% in 2015. Armenia’s participation in Eurasian Economic Union helped to mitigate the above-mentioned headwinds through significant reduction of trade barriers.

In such an environment the Government of Armenia emphasizes structural reforms and continued engagement in infrustructure development projects, such as the North-South Road Corridor Investment program which is one of the major infrastructure programs where ADB plays a pivotal role. I am glad to state that ADB is also engaged in policy dialogue with the Government to further advance reforms.

I would like to stress three topics that to various degree been touched upon in the very perceptive speech by President Nakao and in the statements of fellow Governors. Those are:

1. The role of ADB as member countries' partner in counter-cyclical fiscal policy andstructural reforms;

2. The role of ADB as a partner and catalyst for the private sector investment, that needsmore emphasis to complement counter-cyclical policies;

3. The role of ADB as knowledge repository and provider of timely and relevant policyadvice and technical assistance.

As a conclusion, once again I would like to thank ADB president, Mr. Takehiko Nakao, and his management team, and the very hospitable Government of Germany for the successful organization of this annual meeting. We highlight our commitment to partnership as we believe ADB to be a long-term reliable partner for its members.

Thank You

AUSTRALIA Concetta Fierravanti-Wells, Temporary Alternate Governor

I would like to take this opportunity to thank the Government of Germany for hosting the 49th Asian Development Bank meeting.

It is my pleasure to represent Australia on behalf of the Treasurer, who unfortunately could not be here having just handed down Australia’s 2016-17 Budget last night.

Australia’s economy continues to perform well in a difficult global environment.

And, after slowing in 2015, global growth is expected to improve over the next few years.

The International Monetary Fund and the Organisation for Economic Co-operation and Development have downgraded their forecasts for global growth, although both continue to forecast a pick up from 2016 onwards.

Near-term growth remains uneven and risks to the global outlook remain. These include the risk of a sharper than expected slowing in the People’s Republic of China, geopolitical uncertainties, and continued bouts of financial volatility.

The recent Asian Development Outlook 2016 report notes that growth is slowing across much of developing Asia as a result of the continued weak recovery in major industrial economies and softer growth prospects for the People’s Republic of China.

Our task here with the Asian Development Bank is to respond to these challenges, promote stable growth and increase the region’s productivity. The Bank can play a key role in this response.

Under Australia’s Presidency, the G20 agreed to an ambition to lift collective GDP by 2% by the end of 2018. This recognises the importance of structural reform to growth, at a time when there is increasingly less room for monetary policy to support growth. The Bank can make a significant difference to countries’ capacity to implement structural growth reforms.

I would like to take this opportunity to commend the Bank’s significant work to better optimise their balance sheets. The merger of the Asian Development Fund’s loan assets and operations with the Ordinary Capital Resources is an example of the Bank’s commitment to address the long-term financing challenge.

Australia is strongly supportive of the Bank’s efforts to foster productive private sector investment in infrastructure development and we are pleased to have committed A$10 million to the Asia Pacific Project Preparation Facility. Australia’s support for this initiative underscores our commitment to lift investment in global infrastructure, a critical component to ensuring economic growth and poverty alleviation.

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In a highly interconnected global economy, it is more important than ever that we build relationships and take a cooperative approach to these challenges.

Australia is highly committed to multilateralism – we have a shared responsibility and by working together on a shared vision on the basis of shared knowledge and experience, we can achieve far more than by going alone.

We are keen to see multilateral organisations operate as efficiently and effectively as they can. For this reason, we encourage the Bank to continue to work collaboratively with other multilateral development banks to maximise the development potential for our region.

In Australia, we are equally committed to growth. The Government’s National Platform for Economic Growth and Jobs will transition our economy to support broad based growth over the next decade and beyond. We are an open economy with strong economic links to the region, so growth in Australia is not just good for us, but good for the region.

Australia remains strongly committed to the Asian Development Bank and to working with the Asia-Pacific region. Earlier this week I announced our pledge of A$468.54 million to the replenishment of the Asian Development Fund. This is evidence of our support for the Bank and our commitment to tackling poverty in the Asia-Pacific.

Fragile, conflict affected and small island states face their own unique development challenges, and we encourage the Bank to continue to step up its efforts in these countries. We believe that more can be done, including in areas such as promoting economic opportunities for women and girls.

It is essential that we work together to support sustainable and inclusive economic growth in the Asia and the Pacific to reduce poverty and support a shared prosperity.

Australia will continue to play an active role in working with our partners to face the challenges and opportunities that lie ahead.

Thank you.

AUSTRIA Günther Schönleitner, Alternate Governor

Mr. Chairman, Mr. President, Distinguished Governors, Ladies and Gentlemen,

It is my great pleasure to address the 49th Annual Meeting of the Asian Development Bank in Frankfurt. I would like to thank the Government of Germany and all organizers for the warm welcome and hospitality and for splendidly organising this important event.

Mr. Chairman, let me make the following remarks:

Challenges Ahead Now and Beyond 2020

As the IMF recently emphasized, the Asia and Pacific region is still the fastest growing region with about 5 percent growth in 2015-2017. This trend is maintained even though the growth forecast for the region as a whole was revised slightly downwards, mainly due to considerable global headwinds and moderate growth in the People’s Republic of China. Nevertheless, Asia remains the driver of global growth and growth in the entire region is expected to maintain stable.

However having said that, there are still large and persistent pockets of poverty in the region and the standards of living of many poor people remain a major challenge due to worsening environmental degradation, natural hazards and increasing vulnerability due to climate change. These persistent and large pockets of poverty and disparity are even more worrying, as growing disparities of income and access to jobs, education and public services within and across countries and subregions can undermine security, social cohesion, erode development gains and lead to economic migration movements.

This underlines that ADB’s mandate to fight poverty by promoting inclusive and sustainable economic growth is still highly valid. Against this background it is just as important that development efforts to tackle poverty do not lose sight of the many dimensions the problem might have and that ADB steps up, inter alia, its very welcomed efforts on climate change mitigation and adaptation.

As we have embarked on the discussion of the future corporate strategy for ADB, Strategy 2030, let me point out a couple of suggestions.

We very much support and welcome President Nakao’s vision that ADB should focus on high quality and tailor-made support to the countries in the region. The multi-dimensional challenges of tackling poverty and ensuring inclusive growth are as well reflected in the SDGs which are very ambitious and demand driven agendas for action in the future in order to take up new opportunities to respond to the evolving needs of the countries. Against this background, we would encourage the ADB–whilst focusing on its core strength as a project bank and on thematic areas where it has a comparative advantage–to focus even more on sustainable outcomes and efficient high quality delivery. Business as usual will not work to achieve this goal.

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To tackle the multi-dimensional nature of poverty and by taking into account, that many challenges overlap in areas such as climate change, urbanisation, water, sanitation, education and other social sectors, adequate project design has to be guided by a holistic quality approach.

Just as important is to make sure that the balancing of multiple components in a single project does not lead to delays in project implementation. This requires a strong focus and a hands on approach to ensure quality project design at entry as well as strong and efficient contract management. The ADB has implemented in the past some highly-performing projects, some of which simultaneously supported inclusive growth and environmental sustainability. So the examples are there–the lessons however have to be learned and implemented in a more systematic manner.

We welcome reforms under way to increase operational efficiency and sustainability and hope that these reforms will soon bear their fruits. We hope as well, that ongoing procurement reforms not only aim to decrease implementation delays but also intend to shift to an approach that puts more emphasis on quality and life cycle approaches for projects.

One area where the ADB–together with other IFIs active in Asia–could play a crucial role is in the strengthening of financial markets to catalyse private sources of finance towards development and to help expanding domestic fiscal resources.

Unleashing private potential involves identifying the money that businesses and individuals have at their disposal and encouraging them to move it toward sustainable development. To capture the full potential of these funds depends in part on building attractive destinations for investment, and strengthening financial instruments including public private partnerships that can push more financing toward basic needs, infrastructure, and public goods. Further, according to an ADB report, the region has a huge reservoir of savings–in 2012 the region had $20.5 trillion in collective assets. ADB can help to keep these funds in the region in part through innovative new financial instruments that channel resources towards development priorities, in infrastructure and beyond, including for climate change. In this context, we welcome ADB’s intention to mobilize more investments from private-equity funds and issue more green bonds.

Domestic public resources remain the primary source of financing for development in Asia. They are critical to national and local ownership of public policy and integral to moving toward financial autonomy. Developing Asia could do more to collect taxes as it lags behind much of the developing world in its ratio of tax revenues to GDP, averaging, according to an ADB report, at 17.8 percent compared to 28.6 percent worldwide.

We would encourage ADB to provide assistance to countries to explore all options to expand their resource base, including progressive systems to increase tax and non-tax revenues, stronger regulations to reduce leakages from illicit flows and better protections against shocks. By expanding their resource base, countries could build up not only much needed open and equitable social security systems ranging from access to education, health and pension systems but also increase their spending with regard to investment in research and development and disaster risk reduction. We would like to stress in this context, that we would be open to discussions on greater flexibility on policy-based lending if ADB can demonstrate that these programs provide real added-value and support meaningful and sustainable structural reforms, including an expansion of the domestic resource bases.

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Last but not least, we would welcome if ADB could be at the forefront of inclusive growth agenda. There is convincing evidence that reducing inequality can actually strengthen economic growth. Against this background, we would welcome if ADB develops a set of outcome indicators or measurable milestones to measure ADB’s contribution to inclusive growth. These should form a central part in ADB’s revised Results Framework which needs to be based on ADB’s new corporate strategy, Strategy 2030.

Post Merger of OCR and ADF Resources

With the merger of OCR and ADF resources, ADB has expanded its financial capacity to provide significantly higher resources for lending operations. We welcome that ADB plans to boost its annual lending, increasing from an average of $13.6 billion in 2012-2014 to at least $16.8 billion by 2018, and possibly reaching $20 billion by 2020. We would like to underline in this context that we support the institutional reforms ADB has already started in order to achieve greater efficiency. We would, however, encourage Management not to ease up in their efforts to improve performance and quality of operations and to implement further reforms ranging from HR area to procurement and project readiness to the sustainability of ADB operations.

Replenishment of ADF

We welcome that the proposed strategic priorities for ADF XII continue to be poverty reduction, inclusive growth, climate change, food security, assistance to the fragile and post-conflict recipients and fostering a conducive business environment. Austria is supportive of the proposed scenario. Taking into account some new and innovative approaches including a higher focus on disaster risk reduction and health, we look forward to the evaluation and fine tuning at Midterm Review including a discussion on the long term perspective of ADF.

Mr. Chairman, I wish you and all participants successful deliberations and thank you for your attention.

AZERBAIJAN Samir Sharifov, Governor

Chairperson, President Nakao, Esteemed Governors, Distinguished delegates,

I feel privileged to attend the 49th Annual Meeting of the Board of Governors of the Asian Development Bank in Frankfurt, Germany. On behalf of the delegation of Azerbaijan, I would like to express my sincere appreciation to the Government and people of Germany for their warm welcome and hospitality, as well as, praise organizational arrangements that the host Government made for this Meeting.

Mr. Chairman,

The global economy continues its weak and fragile recovery pace which is exacerbated by a set of complex and regionally diverse macroeconomic forces. International financial institutions have consistently revised their global growth forecasts downwards for the last couple of years, including in 2016, as growth kept underperforming the expectations. While advance economies experience some loss of growth momentum, emerging market economies and lower-income countries are struggling with continuing and alleviated headwinds.

Last year, during the ADB’s 48th Annual Meeting in Baku, Azerbaijan, consensus was that the decline of commodity prices would positively contribute to the overall global economic growth, with benefits to the importers outweighing drawbacks to the exporters. A year down the road, we are facing a completely different outcome. Unfortunately, sharp fall in oil prices has turned out to adversely affect not only oil exporters, but oil importers as well. Regrettably, we are facing a situation where weak and fragile pace of the global economy is further aggravated by facing global demand and shrinking international trade, sizeable reduction of FDI in developing countries from resource-rich economies, as well as increased capital outflows from the emerging market economies.

The current difficult external environment has been posing significant challenges for many Central Asian countries, including Azerbaijan, which is being severely affected by contagion of weak economic developments in the neighboring countries and sharp fall in oil prices. Like many oil-exporting countries, Azerbaijan experienced reduction in export revenues, which was reflected in a contraction of the current account surplus, significant devaluation of local currency and falling budget revenues.

Under these circumstances, formulation and implementation of well-coordinated, broad based policy response is of great importance. Nowadays, we hear calls for policy and structural reforms not only in emerging economies, but also in advanced countries as well. The government of Azerbaijan, in its turn, is planning a transition to a new more sustainable and balanced economic growth model. This model envisages structural changes to diversify economy away from oil and gas, to gradually substitute public investment with foreign and domestic private investment and to stimulate private sector led growth.

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As the main development institution of the region ADB has the capacity and resources to identify and deliver policy responses to the challenges faced by the region, and back them financially. Merger of Ordinary Capital Resources and Asian Development Fund will enable ADB to expand its investments for sustainable and inclusive growth by more than 50% thus creating necessary resource base.

Nevertheless, existing regional and global economic conditions warrant continuous and active role of the ADB in the region. In this regard, I would like to highlight a few points of particular importance:

First, considering the existing global developments, it is of great importance to continue and expand ADB’s lending operations further. Taking into account diverse challenges faced by the member countries, a particular attention should be paid to increased utilization of rapid support instruments for member countries in need, while enhancing flexibility of the processing of standard and special loan facilities.

Second, it is noteworthy to mention that ADB has reached its record performance in terms of lending, private sector and co-financing operations already in 2015. I use this opportunity to thank President Nakao and management of the Bank for these achievements, dedication and hard work. I would also like to commend ADB for adopting a new, flexible and faster approach for approving private sector transactions. Private sector development would reinforce the effectiveness and sustainability of ADB’s operations in the public sector. Thus, I call on ADB management to continue further expanding their operations supporting the private sector development.

Third, ADB needs to ensure that its human resources are at par with the escalating volume of operations and that the depth of its knowledge set is consistently up to date. Thus, it is necessary to significantly revaluate human resource management practices of the Bank that will continue to appeal a diverse, talented skill mix bearing in mind primarily merit, with due regard to regional and member country representation.

Last but not the least, actions revealed in Medium Term Review Action Plan should continue to increase operational effectiveness of ADB, in particular, ensuring higher level of project readiness and prevent procurement delays.

I am confident that the New Strategy 2030 that ADB is currently working on will address these challenges more comprehensively and its implementation will support stronger and better ADB. Azerbaijan in its turn is ready to support and be active participant of the Strategy 2030 consultations.

With all these, I would like to once again thank President Nakao for his vision for stronger, better and faster ADB, and express confidence that under his leadership ADB will be further strengthening its role as the major long-term development partner in the region.

Thank you very much for your attention!

BANGLADESH Abul Maal Muhith, Governor

Mr. Chairman, Honorable Governors, President of ADB, Excellencies,

Ladies and Gentlemen,

It gives me and my delegation immense pleasure to be here in Frankfurt for the 49th Annual Meeting of the Board of Governors of the ADB. Frankfurt has long been an air hub for journeys to the East from the West. I recollect my frequent visits to this city in the last quarter of the last century. Visiting the city after almost two decades, I am struck by the fact that this air hub has been able to retain a somewhat rural way of life. Thanks so much to the city and the German Government for the great attention they have paid to the protection of environment. I wish to join my fellow Governors in thanking the German Government for hosting us and their generous hospitality and the splendid arrangements. I wish to convey my compliments to President Nakao for his dynamic leadership and the unremitting efforts rendered by his team for making the Annual Meeting a success.

The day before yesterday, Her Excellency Chancellor Madam Angela Merkel addressed us about the threat of climate change and suggested that we should not only arrest this threat, but also turn it around. She could boldly admonish us on this subject on the strength of her success in accomplishing it in her own country. She has also asked ADB and the member countries to give the highest importance to the issue of climate change. I am sure that the thrust of her very inspiring speech has instantaneously forced us to stop for a while and ponder about what we can do about it.

Distinguished Guests,

Before listening to Her Excellency the Chancellor of Germany I thought that I shall begin my statement by touching upon the global economic scenario. Global growth, estimated at 3.1 percent in 2015, is projected to rise to 3.2 percent in 2016 and 3.5 percent in 2017. The recovery, which is expected to be more vibrant next year and beyond, is supposed to be primarily driven by the emerging markets and developing economies.

Three key transitions continue to influence the global outlook: (1) the gradual slowdown and rebalancing of economic activities in the People’s Republic of China (PRC) with a view to increasing consumption and services, (2) lower prices for energy and other commodities, and (3) a gradual tightening in monetary policy in the United States in the context of a resilient U.S. recovery. I did not factor into my perception the issue of climate change. However, I picked the second issue of Her Excellency Angela Merkel’s speech about Asian role in the world economy today.

In developing Asia, the PRC and India will continue to dominate the growth, although rebalancing in the PRC will reduce the growth rate. South Asia as a whole is expected to do well.

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Better performance by Asian countries is also very important in the context of global will to eliminate poverty by 2030. Asia Pacific region still holds over 450 million poor people who live on $1.90 a day in 2011 purchasing power parity terms. More than 1.3 billion people—those living on less than $3.10 a day—are at high risk of falling back into poverty again because of their vulnerability to shocks and the proximity of their incomes to the poverty line. Meanwhile, inequality is rising in a number of the region’s more populous countries, and the provision of basic services is under severe pressure in some countries. Thus, it is ever more important that we work together for not only achieving higher GDP growth rates but also endeavor to make our development more inclusive by controlling income inequality as well as promoting equality of opportunity. ADB has to play a proactive and visionary role in leading the change in the Asia-Pacific region.

Excellencies,

ADB’s unstinting support has proved to be instrumental and effective for reducing poverty and improving the quality of life of the people of this region. I would like to record my appreciation of the leadership of President Nakao in steering ADB amidst multifarious daunting challenges posed by the global economy in 2015. I take this opportunity to extend my country’s support to his bid for an extension of his term as the President of the Bank. It is heartening to note the remarkable performance of ADB in 2015. While the number of approvals in 2015 has grown over 2014, the increase is predicated not on project loans but on counter-cyclical support-facility and policy-based or results-based lending. ADB, as a knowledge institution, should focus on project and programme loans where development outcomes can be better observed and realized. Delay in loan processing and procurements need to be addressed for effective implementation of the projects. Decentralization of decision-making process and measures for business process reform need to be accelerated to improve ADB’s development delivery and outcomes. Here attention needs to be refocused on project activities because only new projects can actually bring about restructuring of economies.

Merger of ADF with OCR has been a prudent decision and now ADB needs to scale up its operations to meet the growing demand for better infrastructure, public services, environmental protection and social welfare programmes of its members from emerging economies. To tap this enhanced capacity integrated and comprehensive programs to promote social inclusion and environmental sustainability are expected. It is also expected that ADF beneficiary countries continue to access, at a similar proportion and terms, the newly created concessionary ordinary capital resource lending (COL). I have been emphasizing the need for help to the “fragile and vulnerable” group of countries in several of my appeals in the last few years and once again I shall make the plea.

ADB's Strategy 2020 reaffirms both ADB's vision of an Asia and Pacific region free of poverty and its mission to help developing member countries improve their living conditions and quality of life. We are pleased to note that significant efforts are being made to put ADB on track to achieve the goals of Strategy 2020. However, there are still a number of issues to be addressed. ADB needs to upscale its Regional Cooperation and Integration (RCI) efforts which is expected to play a critical role in accelerating economic growth, reducing poverty and economic disparity, and raising productivity and employment and environmental sustainability.

Distinguished Guests,

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Let me first briefly bring to your kind notice the present state of the economy in Bangladesh before I take up other issues of concern in this august gathering. I take this opportunity to announce that Bangladesh has already crossed the threshold level of lower middle income benchmark. I am very optimistic that it will in the near future graduate from least developed country (LDC) category and be in the rank of higher middle income country. I feel proud to mention here that this achievement has been possible due to the pursuit of pro-people and investment friendly policies under the visionary leadership of our Prime Minister Sheikh Hasina, whose only dedication is people’s welfare in a sustainable environment.

Despite all initial constraints Bangladesh has now reached a development trajectory where the country is regarded as a “role model of development”. Government’s success has emanated from its mission of taking more people out of poverty and commitment to acceleration of domestic demand and taking care of the deprived, disabled, old and lone women through social protection programmes. Bangladesh has been making significant efforts towards ensuring the socio-economic sustainability since long. Poverty in 2014 is down to 24.8% which was around 70% only forty years ago. Food grains production has more than tripled to 38 million tons despite shrinking farm land. Population growth rate, which was 2.8%, has been brought down to 1.37% while life expectancy has risen to 70.7 years from 46 years. Average number of children born per woman has come down from 6.9 to 2.1 and under-5 child mortality rate has been brought down to 4.1%. Although literacy rate is still quite low, less than 60%, the good achievements are: i) primary enrolment rate has risen to 98% with female enrolment at 98.8%, ii) gender parity has been achieved not only at the primary level but also at the secondary level.

Women, in particular poor rural women, are empowered through microcredit support and social protection programmes. The broader economy has undergone deep structural transformation as our manufacturing power-house, garments and fabrics, is growing rapidly. In spite of extremely vulnerable ecology, Bangladesh has established a credible track record of sustained growth within a stable macroeconomic framework. Growth rates have moved upwards from a low of 2-3% in the 1970s to 3-4% in the 1980s to 4-5% in the 1990s to over 6% in the current decade. I am very happy to share with you the forecast that growth would exceed the 7 percent mark in the current fiscal year. Another bright aspect of the growth story is that the rural-urban divide has given way to a rural-urban continuum. The vibrant life of the rural area is a matter of pride for us. Another outstanding feature is that the country of 150 million population and 35 million hectares of land has indeed become one unit of an integrated economy.

Bangladesh also in the last seven years has been giving great importance to resisting climate change. From its own climate change programme it has undertaken projects worth $400 billion in various fields, such as water management, afforestation, zero emission of CFCs and similar projects to both mitigate and adapt climate change. This has been in addition to the climate change programmes undertaken under international assistance.

Ladies and Gentlemen,

Bangladesh attaches great importance to its crucial and time tested partnership with ADB. Thirty -Eight percent of the development assistance of the country comes from the ADB. At the same time Bangladesh is the fifth largest recipient of ADB assistance. We sincerely expect that this cooperation will increase further taking the Bangladesh economy to a new height.

ADB is in the process of preparing Country Partnership Strategy 2016-2020 aligning it with our recently launched Seventh Five Year Plan (2015-2020). The main thrust of the 7 Five Year Plan

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is (i) high growth and inclusiveness, (ii) growth and poverty reduction, and iii) growth and employment.

We hope to raise growth from 7% to 8% by 2020, reduce poverty rate to 18.6% and extreme poverty to 8.9% and create 12.9 million jobs for the economy by 2020.

ADB is playing an important role in supporting investments and reforms in key sectors like energy and power, transport, education, urban infrastructure, agriculture and natural resources of Bangladesh. It has also been playing an important role for cooperation among Bangladesh, Bhutan, India and Nepal through the South Asia Sub regional Economic Cooperation (SASEC) initiative. I would like to congratulate ADB for their support in signing the landmark BBIN (Bangladesh, Bhutan, India and Nepal) Motor Vehicle Agreement (MVA). This will certainly promote regional cooperation, cross border investments, transportation, and people to people connection. Bangladesh has already embarked on developing necessary infrastructure to facilitate implementation of BBIN-MVA.

Though SASEC achieved some remarkable progress over the years in some key sectors it still lacks the proper initiative to unlock the optimum potential of this region. Intra-SASEC countries trade still remains low as well as asymmetric. Currently Bangladesh’s trade with the SASEC countries is simply imports from India and a little from Bhutan and Nepal. This scenario must change and it needs not only a new trade regime but development of cross country communication links.

Another area of our current development programme is emphasis on skills formation. Skills of various types are needed not only for technical projects but also for housekeeping, catering or domestic household work. A large number of training institutions called BMET provides skills training to most people who are accepted in 116 countries as guest workers. In addition, the Ministry of Finance has a skills development umbrella project under which various other institutions dealing with labour and workforce undertake skills training programmes.

Distinguished guests,

In the coming decade, countries in the Asia-Pacific have to work towards making their economies more resilient to economic shocks, social tensions and natural hazards. Their economic growth has to be high, sustained and environmentally sustainable. Investment in transformational infrastructure is a critical need for these countries. ADB, as a regional multilateral bank, has a pivotal role to play in this aspect. Given the widespread poverty situation in the region it is also imperative for ADB to take steps to promote growth with a human face.

With the approval of the sustainable development goals (SDG) and a new climate change agreement negotiated at the end of 2015, we expect ADB to play more dynamic role in this regard and be a proactive agent of positive changes.

I thank the Chairman and other distinguished delegates for this opportunity and your patient hearing.

BELGIUM Stefany Knoll, Temporary Alternate Governor

Mr. Chairman of the Board of Governors Mr. President of the Asian Development Bank Fellow Governors Ladies and Gentlemen

We successfully concluded a few days ago the first replenishment of the new Asian Development Fund which will only provide grants after the transfer of the ADF assets to the Bank's equity. As promised the donor countries received a meaningful discount on their contribution compared with the amounts contributed to the Fund four years ago.

The other side of the meddle is that some of the risks involved in the merger initiative have a stronger likelihood to materialize.

The world economy keeps struggling to recover from the crisis which resulted from the financial crisis of 1998. The slowdown of the economy of the People’s Republic of China (PRC) has had an adverse impact on the export earnings and the budget of many developing countries, and on their indebtedness. This has an impact on the magnitude required of our assistance and on the type of assistance we will have to provide.

The massive injection of cheap money in the economy through low and even negative interest rates has delivered disappointing results, such as a sluggish growth in donor countries and an inflation of the price of investment assets raising concerns about a forthcoming bubble and an increase in value of the assets of the wealthy. This also resulted in massive layouts in banks where the profitability has to be kept by cost reductions and in the unattractiveness of classical savings instruments used by most of us. Inequality is indeed on the rise and not only in recipient countries.

This cheap and negative interest rates have also an adverse impact on our operations. Cheap borrowings provide the opportunities for our recipients to find elsewhere less constraining funding for their projects and programs, which reduces demand for our resources and the opportunity to promote our agenda.

With the slowdown in the global economy, there is hence an increased risk of over-indebtedness and hence a need for future higher than expected grant assistance, putting under stress our plan to reduce grants thanks to an improvement of the debt service capacity of our recipients and of their GDP per capita.

This being said the major parameter for grant assistance is the evolution of Myanmar and Afghanistan. Let us hope that the economy of those two countries will evolve towards less fragility and an income level allowing them to borrow OCR concessional resources.

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This adverse environment for investments is now weighing considerably on the capacity of ADB to generate income and grow its equity, while funding the ADF. This is particularly damaging when the size of the economies of the clients is growing faster than the volume of assistance ADB can provide since it reduces the incentives we can provide to promote the right set of policies for economic and social progress. The decision of ADB to stick to a 1 billion USD contribution to ADF and secure the discount of other donors might result in a pause of at least four years in the growth of the bank's equity and its ability to follow the client.

To generate income the options of ADB are limited. The bulk of the net income depends on the volume of liquidity and on the level of interest rates. Sovereign lending is designed like a non-profit activity where costs are covered by the pricing of loans. The latest discussion on an increase of loan charges to increase equity and tackle the lending constraint of OCR highlighted that borrowers are not keen on paying more to borrow more. The present level of market rates makes this an even more remote option.

On the income side the last option is the increase in private sector operations where loans are priced according to risks and the margin higher than on sovereign loans and where equity investment can generate capital gains. In this respect the private sector operations have been the main beneficiary of the merger. Let us hope that ADB will put the private sector department in a position to seize this opportunity to increase this kind of operations and the income prospects of the bank.

In the area of private sector promotion, except at the World Bank where IFC has been set up to deal with it, the other IFIs have always been struggling to reconcile the social dimensions of those activities with the economic and financial constraints of private sector operations as well as the need to be flexible and fast in responding to the client's needs. It would be timely and opportune to have a closer look on the advantages of spinning off the private sector department with specific rules and procedures, a more adequate location and a specific human resources policy, including salaries and benefits.

In this respect ADB would have a tremendous advantage since gathering private sector operations in a full-fledged subsidiary paying dividends to ADB would make a lot of sense. It would also allow to put an end to the endless discussions on the salaries and benefits of the whole bank which has to pay salaries attractive enough for people well paid on the market but inflating the salaries of other staff for whom the market is paying less. It would also allow ADB to get closer to its clients and business partners.

On the expenditure side, can we like other banks reduce expenditure to preserve profit margins? Yes and no. The activities of IFIs are labor intensive and the quality of the output requires a substantial involvement of staff in all steps of the project cycle. The weaker the counterpart, the heavier the involvement. In addition the requirements related to due diligence and safeguards and the involvement of all stakeholders have increased the workload significantly. One can of course lighten up the bureaucratic aspects of the work but in the end some steps can be accelerated but not ignored. In addition delegating those tasks to local entities cannot be done yet without quality control. ADB has always been cost conscious and one can quickly reach the flesh while trying to cut the fat. Some spending items are already minimized such as the travel budget while some other items have to increase such as decentralization and remuneration of local staff, for who growth, inflation and skills scarcity push salaries up above average. One has therefore to exercise caution in cost cutting.

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Another opportunity of cost reduction is to remain a financier of large scale projects. A growing share of our activities are small scale, custom made operations and this has an impact on the workload and the requirement to spend to comply with all the constraints. We are of the view that the bulk of ADB activities has to remain in large scale infrastructure and wholesale financing such as loans to local intermediaries for SME development.

The inability of shareholders to provide enough resources to allow ADB to grow with its clients has two consequences: on the one hand ADB has to generate its own equity by growing its income and, on the other hand, it has to focus its operations further and further on those having the most impact on its development indicators.

The cost of dealing with all of the priorities of the agenda is growing, meaning that each operation requires a growing volume of resources compared with similar operations in the past. An almost stagnating commitment capacity means that something in the agenda has to give in and that ADB needs to increase the leverage on its own resources.

In terms of leverage, the promotion of good policies and institutions in the financial and public sectors would get a bigger multiplying effect than the search for partners project by project. The reform of the financial sector in Cambodia offers a good example of what can be achieved by removing the obstacles of local financing of local projects.

It is time to change the approach since Infrastructure financing will soon show its limits. The improvements in infrastructure give a boost to the economy and should not be given up. However the public sector is not always able to generate income to foot the bill of the construction and the additional burden of maintenance. The example of many donor countries where maintenance is underfunded due to budget constraints illustrate that in the medium term the issue of sustainability will be harder to tackle if we do not focus seriously on the generation and sound management of government revenue. This has been neglected too long in countries where revenue to GDP reaches at best 15%, which is much too low to build a key ingredient of sustainable development, i.e. a strong State able to fulfill all its obligations.

The slowdown of the regional economies is raising again the issue of fast disbursing assistance to reduce the impact of a decrease in tax and exports revenue. This kind of assistance brought mixed results in the past since the subsequent improvements were mainly due to an overall recovery than to the impact of the reforms implemented against policy-based loans. The impact of ADB is further reduced by the decrease of the magnitude of its lending capacity compared with the size of the regional economies. One can raise doubts about its counter-cyclical potential and we should therefore refocus this type of loans on issues where ADB funds and advice would have a meaningful impact and leverage local resources, such as in the modernization of public sector management, of tax systems and of local financial markets.

In December 2015 COP21 has successfully brought together all decision makers to act to save the planet from climate change. We are aware that a reduction in the consumption of fossil fuels will be a key parameter of success. In this respect the PRC’s economic slowdown is a major contribution to greenhouse gas emissions. We are also aware that with six billion dollars of annual commitments for climate-related operations the contribution of ADB will be somewhat modest but well chosen projects can have a strong demonstrational impact. We also encourage ADB to use its policy-based loans to develop incentives for environmental solutions in its borrowing members.

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To conclude, Mr. Chairman, Belgium keeps ADB achievements in highest regards and hopes it will successfully implement its internal reforms to remain the most efficient development partner of its donor member countries.

BHUTAN Namgay Dorji, Governor

Mr. Chairman, Mr. President, Fellow Governors, Ladies and Gentlemen,

It is indeed a great pleasure for me and my delegation to be here in Frankfurt for the 49th Annual Meeting of the Board of Governors of the ADB. At the outset, I would like to convey greetings from His Majesty the King, the Government and the people of Bhutan.

I would like to thank the State of Hessen and government of Germany for extending kind hospitality and warm welcome to me and my delegation. I also would like to express our sincere appreciation to President Nakao and the ADB team for the excellent arrangements made for this Annual Meeting.

Excellencies, ladies and gentlemen, it is heartening to note that the global growth, currently projected at 3.4 percent in 2016 is estimated to grow at 3.6 percent in 2017.

Bhutan’s economic growth has improved from 2.1% in 2013 to 5.5% in 2014. It further improved to over 5.5% in 2015. The projected increased growth is due to steady performance of the services and industrial sector. The poverty rate has substantially declined to 12% in 2012, about half from 5 years ago in 2008. The country’s human development index has steadily improved, growing on average by 1.4% over the last 5 years to 2014.

Employment rate has remained at over 97%, although disparities persist with much higher unemployment in urban, among women and youth.

On the external front, Bhutan is confronted with high current account deficit due to higher import of goods and services. The trade deficit is expected to widen from 20.8% of GDP in FY 2014-15 to 25.4% of GDP in FY 2015-16. As a result the current account deficit stood at 28.8% of GDP in FY 2014-15 and is projected at around 31% of GDP in FY 2015-16.

On the fiscal front, the FY 2014-15 ended with a marginal surplus of 1.5% of GDP. However, during the current fiscal year 2015-16, the fiscal position is projected to end in deficit as spending increases in social sector reforms along with the capital intensive projects. The total debt is expected to go up from 96.5% of GDP in FY 2014-15 to 99.9% in FY 2015-16.

I would like to compliment President Nakao for his dynamic leadership and guiding ADB towards many reforms in a short span of time including the merger of ADF with OCR as it provides an extraordinary increase in ADB’s lending capacity. Bhutan’s partnership with ADB started in 1982 and we consider ADB a reliable and important partner for achieving our development priorities.

Mr. Chairman, ladies and gentlemen, since becoming member, Bhutan has received development support from ADB in sectors such as energy, transport, finance, and urban development. ADB is currently Bhutan’s largest multilateral development partner. ADB’s assistance in the form of budgetary support has helped to improve the fiscal position and provided flexibility to respond to the changing priorities of the RGoB.

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I am also happy to report that all ongoing ADB funded projects and programs are progressing well. These projects and programs will bring immense benefit to Bhutan’s socio-economic development and in improving the living standards of Bhutanese people.

To conclude, I would like to once again express our appreciation and gratitude to President Nakao and ADB management for the continued support extended to the Royal Government and the people of Bhutan. We would like to wish success to President Nakao in carrying forward the reform initiatives successfully.

I thank the Chairman and the distinguished delegates for this opportunity.

Thank you

BRUNEI DARUSSALAM Pehin Dato Abdul Rahman Ibrahim, Governor

Bismillah Hir Rahman Nir Rahim.

First and foremost, on behalf of the Government of His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam, let me express our sincere gratitude and appreciation to the Government and people of Germany for the warm hospitality and for the excellent hosting of the 49th Asian Development Bank (ADB) Annual Board of Governors’ Meeting in this modern and dynamic city. Taking this opportunity, I would also like to thank His Excellency Mr. Takehiko Nakao, the President of the ADB and the ADB Secretariat for the excellent arrangements.

This year’s annual meeting is set in a background of challenging economic situation. Global economic is growth is moderating compared to a year ago, uneven and still below the growth potential before the Global Financial Crisis of 2008. Growth rates in Asia too are expected to moderate in the medium term at the backdrop of increasing market uncertainties and volatilities. Moderating growth could pose huge challenges and threaten our efforts and collaboration in achieving ADB’s goal of alleviating poverty in Asia. Therefore, we need to remain vigilant and be mindful of possible downside risks and vulnerabilities through enhanced partnership and economic dialogue to build resilience and maintain economic sustainability to be able to continue to push such efforts in a steadfast manner.

Global trade and investment continue to be important engines of economic growth and development, generating employment and contributing to welfare and inclusive growth. Global trade remains below pre-crisis levels. I believe the ADB, as an important partner of development in the region, can play an important role raising global trade and investment, especially in three key areas.

First, enhancing partnership in infrastructure development and connectivity in the region. Infrastructure development plays a catalytic role in enabling an economy to reach its full potential and promotes regional connectivity. Regional connectivity resulting from important infrastructure investment in logistics, information network and connectivity improvement can provide a much needed impetus to raise the levels of economic potentials as the volume of intra-regional trade increases and the region’s own competitiveness is enhanced. In line with G20 and the Addis Ababa Action Agenda, we hope that the ADB can continue to strengthen its role in mobilising finances for bankable projects with high development impacts to the region and promote international best practices in collaboration with other International Financial Institutions, Multilateral Development Banks (MDBs) and private sectors in the form of PPPs.

Second, partnership in enhancing regional integration and cooperation. The ADB has been an important partner in promoting regional integration and cooperation in the region, especially through the ASEAN and ASEAN+3 frameworks. Such support from ADB through the transfer of knowledge from ADB to member countries and sharing of knowledge and experiences between member countries has helped narrow development gaps and enrich institutional capacity and development of member countries. We hope the ADB can continue to provide such support in an unwavering and inclusive manner.

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Third, partnership in private sector development. I call on ADB to strengthen and expand further private sector development in the region, particularly in the area of entrepreneurship development. This includes developing entrepreneurial skills among the youth. In many countries successful entrepreneurs often provide financial support to fund community projects and charitable foundations. Taking into account the important contributions of private sector development, we welcome ADB’s efforts and active role in supporting SME development in member countries.

Mr. Chairman,

Taking this opportunity, I would also like to congratulate Mr. Takehiko Nakao on the successful conclusion of the 12th Asian Development Fund (ADF12) negotiations with the donors. This marks the first ADF year, in which ADF resources is combined with the OCR. I believe such innovative efforts can enhance ADB’s lending capacity further and can benefit our member countries in the long-term, especially the most vulnerable countries in the region. In this context, we encourage ADB to continue to be effective and efficient in using the available financial resources, given the increasing challenges and limited resources available.

With that, let me conclude by commending ADB’s continuous initiatives under the able leadership Mr. Takehiko Nakao, toward a more result-oriented organization, resulting in better project performance and management, as well as improved responsiveness to the needs and voices of all member countries. We call on the ADB to build upon these initiatives and achievements which are instrumental in fostering economic development and cooperation and alleviating poverty in the region.

Thank you.

CAMBODIA Vongsey Vissoth, Alternate Governor

Mr. Chairman President Nakao Fellow Governors, Ladies and Gentlemen

I would like to join fellow Governors in expressing our sincere appreciation to the Government of Germany and people of Frankfurt for hosting the 49th Annual Meeting of the ADB Board of Governors and the warm hospitality extended to my delegation during our stay in this beautiful city of Frankfurt.

At the outset, let me express our deep condolences to the people and government of the Republic of Fiji that was severely affected by Cyclone Winston in February. Our deep condolences also go to the people and government of Japan that was struck by Kumamoto earthquakes last month.

Ladies and Gentlemen

The global economy continues to show persistent growth sluggishness. At the same time, though still remaining an engine of the global growth, growth in the Asia and Pacific also slowed down in 2015, and is forecast to remain moderate in 2016 due to the downside risks from the slowdown in the People’s Republic of China (PRC) and the slow pace of recovery in the advanced economies. We, therefore, must employ the full range of policy measures in structural reforms to augment labor supply, improve productivity, enhance institutional quality, and maintain macroeconomic stability to mitigate its negative impacts.

In 2015, we saw a paradigm shift in the global development agenda with the adoption of the new Sustainable Development Goals (SDGs) at the UN and the Climate Change Agreement reached in the Conference of Parties (COP 21) in Paris. This signals the need for MDBs to make adjustments to their development agenda. In this connection, ADB has a central role to play in this new framework to help shape the new direction of the region, while not neglecting the capacity and needs of member countries, especially the poor ones in financing traditional types of project and program, and in pursuing knowledge, know-how and technology based on their specific conditions. This requires the Bank to redefine its vision and strategy to stay relevant to the region and to its members. We look forward to a sound corporate strategy 2030 of the Bank and to an open and widely consultative process of its formulation.

We are also seeing a change in the development financing landscape in the world, with the launch of the Asian Infrastructure Investment Bank (AIIB), the BRICS New Development Bank and the PRC’s Silk Road Fund as new sources of development financing. In this context, we welcome the recent conclusion of cooperation agreement between ADB and AIIB. This could greatly increase investment in and reduce infrastructure deficits which currently constrain market led growth and access to social services in many of the developing countries, which would result in more sustained and rapid development in the region.

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Ladies and Gentlemen

May I join fellow Governors in congratulating President Nakao and his management team for the successful merger of the ADF lending operations with the ordinary capital resources, which is a milestone development for the ADB and critical for scaling up its operations and support to Asia and Pacific. That would result in the Bank’s annual operation increase in loans and grants to reach $20 billion by 2020 including an increase in the assistance to ADF recipient countries. At the same time, we commend the Bank for the record achievements in 2015 which saw a considerable increase in loans, grants, co-financing and private sector operations, disbursement of which would have real positive impact on livelihoods and better growth in the recipient countries and in the region. Cambodia is also pleased with the commitment by President Nakao to double the annual climate financing to $6 billion by 2020.

May I also congratulate the President for successfully concluding the negotiations for the 12th replenishment of the ADF. In this regard, we thank donor countries for their continued support and contribution to the ADF.

Now allow me to turn to the recent development in Cambodia,

Cambodia continues to sustain its strong growth trend over the past decade with a solid growth rate of 7% in 2015 as a result of marked expansion in industry (11.7%) and services (7.1%). Agriculture grew by a mere 0.2% as a result of the unusual drought brought about by El Nino. Cambodia has been successful in maintaining macroeconomic stability with key indicators showing improvement in all areas. Inflation reduced to 1.2% in 2015 compared to 3.9% last year and is projected to be at 1.9% in 2016; fiscal deficit narrowed to 3.7% of GDP in 2015; Gross international reserves rose to ensure 4.5 months of imports; public debt level belongs to one of the lowest in the region and debt sustainability is rated as low risk to debt distress. In the meantime, poverty rate has been reduced to 14% in 2014 from 53.4% in 2004.

Going forward, GDP growth is forecasted at 7.1% for 2016 and 6.9% in 2017, indicating that Cambodia is in the right growth path despite the sluggish growth in advanced economies and the moderating of growth in the PRC. Cambodia is focused on achieving our vision of becoming an upper middle income country by 2030 by targeting an average growth of 7% during this period. Our emphasis is on making growth more inclusive, resilient and sustainable through cohesive and coordinated development strategies and plans that focus on macroeconomic stability, economic diversification, increased competitiveness and enhanced productivity through more investment in infrastructure connectivity, education quality improvement and skills development, improving regulatory environment, and reform public sector management, building social safety net, as well as strategic integration with the region. We will continue to make bold interventions in the development of key sectors including agriculture and industry. We believe that our Industrial Development Policy (IDP) launched last year will be instrumental to creating space and opportunities for long term sustainable and inclusive growth.

We thank the ADB for the assistance so far extended to our country which considerably contributed to our durable economic growth and sustained development in Cambodia and look forward to even a stronger partnership with the Bank in achieving our country’s development goals, as well as building the region with vibrant and sustainable development in the coming years.

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In conclusion, I thank President Nakao and his Management Team and Staff for the excellent arrangements for this Annual Meeting and trust them in making the Bank faster, bigger and better.

CANADA Patricia Peña, Temporary Alternate Governor

On behalf of Canada, I would like to thank the Government of Germany for hosting this year’s annual meeting of the Asian Development Bank (ADB).

Canada places great value on our relations and continued engagement with the Asia-Pacific region, both through strong bilateral relationships, and through regional multilateral organizations such as the ADB.

Canada welcomes the early and ongoing discussions and consultations on a new Strategic Corporate Framework to guide the Bank’s operations over the next decade, Strategy 2030.

Given current economic challenges and the speed at which the global development landscape is evolving, including with the ongoing implementation of the 2030 Agenda for Sustainable Development, we cannot afford to lose momentum, nor waste this unique opportunity for the Bank, its member countries and the Board of Directors to reflect thoroughly and strategically on the ADB’s past, current and future work.

The ADB has been at the forefront of innovation by merging its concessional window equity with that of the Bank’s Ordinary Capital Resources, as of January 1, 2017, to maximize the Bank’s development impact. Canada would like to commend President Nakao for his leadership on this merger. Through the G20, Canada has been advocating for multilateral development banks (MDBs) to optimize their balance sheets in order to open up additional resources for development financing. As such, Canada would like to emphasize the importance of the Bank continuing to explore further opportunities to innovate, particularly with regards to catalyzing private sector resources, thus helping the Bank remain responsive to the evolving needs of its developing member countries.

It is also crucial for the ADB to build on its comparative advantage and true value added in an increasingly crowded field of developments partners. This means:

Avoiding an unnecessary proliferation of sectors of activities; Exploring further partnership (including knowledge partnership) opportunities; Putting greater emphasis on the ADB’s real strengths and areas of expertise; Striving to not just increase business volumes but also to design and implement quality

projects that have clear, positive, development impacts (even in highly complex ordifficult contexts);

Actively promoting merit-based appointments; Further bridging of the gender gap, at the ADB and throughout the Asia-Pacific region by

empowering women and girls, addressing the systemic barriers they face and providingthem with the tools and opportunities to be powerful agents of change.

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Canada believes that “Poverty reduction”, inclusive growth and assistance to the Bank’s poorest and most vulnerable Developing Member Countries (such as countries in Fragile and Conflict Affected Situations) should remain the Bank’s central mandate, moving forward.

The ADB has a proven track record in reducing poverty and improving the lives of the poorest people of Asia and the Pacific, a region still home to two thirds of the world’s poor, through the assistance of the Asian Development Fund. Canada welcomes the Fund’s prioritization of poverty reduction, and its commitment to the new Sustainable Development Goals and to the outcomes of COP21.

Compounded by the new challenges of climate change and mounting environmental costs of growth, uneven progress, both within and across countries, threatens to hamper the region’s long-term prospects. As such, the support that the Fund will provide in the years to come to the 29 countries only eligible for concessional assistance, among them nine countries in fragile and conflict-affected situations, will be crucial.

Canada was pleased to announce, during the pledging session concluding the Eleventh Replenishment of the Fund earlier this week in Frankfurt, that we would contribute our fair share by pledging CAD137.56M (USD101.96M) for the 2017-2020 period. This highlights Canada’s enduring commitment to the Bank, to the Fund and the region as a whole.

Canada also strongly believes that in the next ten years, the ADB should retain its focus on environmentally sustainable growth in the Asia-Pacific region, including through its support to the greater use of and clean and renewable energy.

Canada is keen to play a leadership role in international efforts to combat climate change and provide assistance to countries that are vulnerable to the destabilizing effects of climate change, including through climate finance.

Last December in Paris, 195 countries came together to adopt a historic and ambitious new climate change agreement. The Paris Agreement strengthens global efforts to transition to a low-carbon, resilient economy, while recognizing the need to support developing countries’ efforts to reduce greenhouse emissions and adapt to the adverse impacts of climate change.

Canada is committed to supporting the poorest and most vulnerable countries in adapting to the adverse effects of climate change, and is doing its part to mobilize critical investments that will achieve sustained emissions reductions in developing countries. To this end, Canada has committed C$2.65 billion over five years to help developing countries tackle climate change. This contribution will be delivered through a variety of channels and instruments, and will support both mitigation and adaptation, particularly to the poorest and most in need.

Canada has long been a strong supporter of actions taken by the ADB and other Multilateral Development Banks on climate change. We welcome the ADB’s recent commitment to double its annual climate financing to $6 billion (or 30% of its overall financing) by 2020, up from the current $3 billion. We would encourage the Bank to develop a Climate Strategy to meet this ambitious goal, and also to play a greater and more catalytic role in promoting clean energy throughout the Asia-Pacific region.

In recent years, Canada has established climate facilities at multilateral organizations, including the CAD$82.4 million Canadian Climate Fund for the Private Sector in Asia at the ADB. These facilities aim to catalyze private sector investments in climate-friendly projects, including projects

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that increase renewable energy and energy efficiency, support urban infrastructure and sustainable transportation, and support climate adaptation. Canada will continue to work with partners to tackle climate change.

To conclude, Canada remains more committed than ever to the Asian Development Bank. The Bank’s impact on poverty reduction has been deep and far-reaching across Asia and the Pacific. In addition, the Bank has proven to be a unique source of knowledge on the region and its challenges. We look forward to further deepening Canada’s constructive engagement with the Bank in the months and years to come.

PEOPLE’S REPUBLIC OF CHINA Jiwei Lou, Governor

Honorable Chairman Hans-Joachim Fuchtel, President Nakao, Dear colleagues, Ladies and gentlemen,

The world economy is faced with great challenges. On the surface, the insufficient aggregate demand is often blamed for the woes of the global economy, however, the root cause lies with the supply side as evidenced by the outstanding medium-and-long term structural problems, declining growth rate of the Total Factor Productivity and the decreasing level of potential output. In light of this, we must expedite the process of structural reform, enhance the economic flexibility and resilience, and give impetus to sustainable economic growth through innovation. The important task of structural reform is also high on agenda of the Asia-Pacific region, the locomotive of the global economy. Against this backdrop, as a major multilateral development institution in our region, ADB should adapt itself to the changing situation, and proactively make even bigger contribution to the sustainable development of our region and the rest of the world. In this connection, I would like to share four observations.

First, formulate a more forward-looking development strategy. We believe that poverty eradication should be one of ADB’s central objectives, but not its only objective. Given that UN has launched the 2030 Agenda for Sustainable Development and increasing number of ADB’s developing members have joined the ranks of middle income and upper middle income countries, the primary priority among those countries is no longer simply poverty relief, but the achievement of sustainable development around three pillars: social, economic and environmental. At the same time, sustainable development per se is also an issue for ADB. Therefore, we support ADB to formulate as soon as possible the strategy for middle and upper middle income countries to help its developing members to further strengthen their capacity for endogenous growth, particularly to support them to promote human capital development, technological advancement and institutional innovation, enhance economic efficiency, reduce inequality and achieve shared development. Meanwhile, we also expect ADB to actively assist developing members to address climate change and other global challenges, participate in the provision of regional and global public goods, and promote South-South cooperation.

Second, develop more innovative policy instruments. Traditional instruments like loans and technical assistance need to more flexible and accessible, while new policy instruments also need to be explored to better satisfy the diversified demands of developing members. We encourage ADB to help promote structural reforms of the developing members with the Policy Based Lending and Result Based Lending. We urge ADB to develop new instruments to strengthen the capability of the developing members to cope with external shocks. We hope that ADB could enhance the quality of its projects as G20 has encouraged MDBs to formulate quantitative ambition for high-quality projects, and I believe ADB would take the lead by taking concrete actions to further enhance the efficiency and effectiveness of its development assistance.

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Third, improve the governance structure and institutional capacity. The existing governance structure of ADB was set up in the 1990s, as such; it not only fails to reflect the current economic and social landscape in the Asia-Pacific region, but also fundamentally constrains the fulfillment of ADB’s role. We hope that ADB could soon put the governance structure reform on its agenda. Meanwhile, we expect ADB to make the best use of its increased lending capacity brought by the merger of ADF and OCR, raise its leverage ratio, minimize idle resources, play a counter-cyclical role, and increase infrastructure investment. We also support the ADB’s human resource reform aimed at deploying more staff to serve clients better and more directly.

Fourth, expand partnership across the board. We call on ADB to expand cooperation with the existing bilateral and multilateral development institutions and increase project co-financing by exploring the mechanisms for revenue and risk sharing. At the same time, ADB also needs to boost cooperation with the new MDBs such as the Asian Infrastructure Investment Bank and the New Development Bank. As the new MDBs are now up and running, we hope the existing MDBs and the new ones could learn from each other and strengthen cooperation in the areas of project development, knowledge sharing, and personnel exchange. In addition, we expect ADB to further enhance its cooperation with the private sector. In particular, given the low-interest rate environment in the world, ADB is in a position to explore innovative financing modalities to mobilize private sector capital for development financing.

Dear colleagues,

This year marks the 50th anniversary of the establishment of ADB and the 30th anniversary of the People’s Republic of China (PRC)-ADB cooperation. The PRC will continue to support ADB and deepen its cooperation with ADB in all aspects. In February, ADB Board of Directors endorsed the new Country Partnership Strategy (CPS), which lays out the priority areas for PRC-ADB cooperation from 2016 to 2020. At ADF 12, the PRC pledged a donation of 100 million US dollars, a substantial increase of 122% over its donation at ADF11. We hope ADB, standing at a new historical point, will grow better and stronger through reform and make greater contribution to poverty reduction and development in the Asia-Pacific region.

Thank you.

FIJI Aiyaz Sayed-Khaiyum, Governor

Chairman of the Board of Governors President of the ADB Fellow Governors Distinguished Guests Ladies and Gentlemen

I join my fellow Governors in expressing our gratitude to the people and Government of Germany for the warm welcome and courtesies extended to the Fijian delegation. I also take this opportunity to thank President Nakao and his team for the organisation of the 49th annual meeting of the Asian Development Bank (ADB) Board of Governors here in Frankfurt.

Before I proceed, allow me to on behalf of our Prime Minister and the people of Fiji, record our sincere appreciation to the ADB and fellow member countries for the messages of condolence and support that we received following the devastation caused by Cyclone Winston which was the strongest cyclone ever recorded in the southern hemisphere and the second strongest in the world. We are grateful for the generosity of the international community and our development partners in providing humanitarian and relief assistance. I also acknowledge ADB’s US$2 million grant to finance immediate relief efforts, in addition to its commitment towards the subsequent rehabilitation and reconstruction work. A joint post-disaster needs assessment led by the World Bank, with participation from the United Nations, European Union and ADB, assessed total damage and loss at approximately US$1.4 billion – slightly over 30 percent of Fiji’s annual GDP.

Within a month of Cyclone Winston, we were also hit by Cyclone Zena which caused flood damage.

Mr Chairman, I note that a joint statement has been presented on behalf of the Pacific Developing Member Countries by the ADB Governor of the Cook Islands. I also wish to present a statement on behalf of the Republic of Fiji given our country’s relationship with ADB and also in light of the recent cyclones and its impact on our economy.

Fiji’s Economic Performance and Outlook Mr Chairman, the Fijian economy grew by 4.2 percent in 2015 following the 5.3 percent achieved in 2014. Fiji’s strong economic expansion has become increasingly embedded with growth averaging around 4.7 percent for the three years up to and including 2015. Aside from supportive macroeconomic policies, key growth drivers have included accommodative financial conditions, resurgent construction activity related to improved political and macroeconomic confidence, Government’s infrastructure spending and increased private sector investment. In addition, elevated retail and consumption supported by remittances and low world oil prices combined to support increased demand and elevated activity in the manufacturing and service sectors.

For 2016, the impact of Cyclone Winston has lowered the growth projection from an earlier 3.5 percent to around 2.4 percent, as the agriculture (especially sugar cane), water, electricity, insurance and communications sectors have been negatively impacted. However, post-cyclone

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reconstruction and rehabilitation should underpin the still positive 2016 growth outlook, together with an expected pick-up in the largely undamaged tourism sector.

On the fiscal front, the Fijian Government has maintained strong financial discipline with average annualised net deficit for the last five years (2011 to 2015) at around 1.8 percent. More importantly, the debt level has been maintained below 50 percent as a share of GDP over the same period. To ensure fiscal sustainability and value for money, all borrowings are channelled towards bankable projects with positive internal rate of return.

Mr Chairman, given Fiji’s strong macroeconomic fundamentals and the fact that our core tourism, industrial and large commercial centres remain relatively intact post-Cyclone Winston, we anticipate quick economic recovery for this year. Elevated remittances further boosted by the special response of the many Fijians abroad as well as our international friends following the cyclone, will also provide added impetus to economic activity. Overall, this year’s economic outlook remains positive although risks associated with the slowing global economy and further natural disasters, remain.

The continued accommodative monetary policy stance by the Reserve Bank of Fiji (RBF) also supports Fiji’s economic recovery into the near and medium terms. The RBF’s twin monetary policy objectives are expected to remain stable throughout this year with year-end inflation expected around 2 percent and foreign reserves projected at around F$2 billion, sufficient to cover 5.4 months of retained imports of goods and non-factor services. In addition to the Fijian Government’s deliberate focus on higher infrastructure spending, fiscal policy has also been equally supportive of consumer and business demand via positive tax measures and increases in public sector wages. Improved tax compliance and broadening of Value Added Tax has ensured that revenue from tax receipts remain buoyant. The Government has not only enhanced the value and maintenance of public assets but it has increased investment in the development of human capacity and resources through the introduction of the free primary and secondary education programmes as well as loan schemes for tertiary education. It has also increased spending in the health sector. These initiatives have raised Fiji’s economic growth potential through key improvements to the business environment, enhancing physical and human capital while simultaneously making economic growth more inclusive.

Fostering Cooperation for Development Mr Chairman, we acknowledge President Nakao‟s first official visit to Fiji in August last year and ADB’s Country Partnership Strategy (CPS) for Fiji. Under the CPS, ADB has offered a facility of US$350 million over a period of 5 years from 2014 to 2018, including US$100 million committed for a road and jetty project in December 2014. Fiji also notes that ADB’s focus on promoting inclusive growth and poverty reduction in Fiji, via direct investments in transport and urban water/sanitation infrastructure plus improved public sector management, have yielded real benefits for the Fijian people. The availability of increased funding from ADB to fund road projects has improved accessibility to markets and also uplifted the efficiency for our rural dwellers. Consistent with the Fijian Government’s priority for strengthening Fiji’s transport infrastructure and inclusive growth, we are appreciative of the ADB‟s aim in rehabilitating roads and bridges and ensuring that Fiji’s infrastructure projects are resilient to climate change and natural disasters. In fact, this ties in neatly with the overall theme of this year’s annual meeting, “Cooperating for Sustainability”.

Fiji is also pleased to note that the ADB in 2015 announced a doubling of its climate financing to US$6 billion by 2020 in order to assist developing Asia in the fight against climate change. We are also keen in ensuring that the support extended to Fiji is implemented effectively.

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It should also be noted that the 2015 Green Climate Fund (GCF) approved US$31 million climate adaptation grant earmarked for the ADB’s planned Fiji Urban Water Supply and 4 Wastewater Management Project which will benefit a third of our population. The Project will also ensure that the water system will be climate-proofed through strengthening the pipes to make them more resilient to flooding and moving the water intake point higher up the Rewa River source to avoid saltwater intrusion.

Internationally recognised projections indicate that the Pacific region will suffer large-scale negative impacts of climate change, such as rising sea levels, higher temperatures, frequency and intensity of cyclones and El Niño-related droughts. We have experienced these very extreme weather events in Papua New Guinea, Vanuatu, Fiji and Tonga over the past two years. This has major implications for crop and fishery yields and has the potential to ultimately affect the livelihoods and food security of our people, as most of our small island economies rely heavily on agriculture and fisheries for survival and economic activity. In this regard, actions to integrate and build capacities in sustained fishing and agricultural output, need to be actively pursued.

We are of the view that climate finance should be mainstreamed with development finance to ensure that the overall asset base is climate resilient and are well placed to withstand any climatic shocks.

Mr Chairman, Fiji also recognises that the Asian Region will continue to register solid growth and therefore we would benefit from leveraging off this long-term strong regional growth outlook. Given the central role of the private sector in creating business and trading links between Fiji and Asia, the Government is strongly committed to strengthening the business environment in Fiji as demonstrated by the introduction of relevant fiscal and tax measures to promote higher domestic and foreign investment. Consequently, total investment has steadily grown, from 16.8 percent of GDP in 2012 to an estimated 22.5 percent in 2015, with private sector investment contributing around 13.3 percent of GDP. Fiji acknowledges the potential opportunities inherent in greater economic integration with fast growing Asian countries. Notably, our total trade (sum of exports and imports) with Asia has grown from F$2 billion in 2010 to F$3.3 billion in 2015.

In addition, the Fijian Government has remained committed to its structural reform agenda in order to strengthen the ease of doing business in Fiji, placing Fiji’s growth on to a more sustainable path and making economic growth more inclusive. Mr Chairman, Fiji will continue to pursue prudent macroeconomic management policies. After some stalling, progress in key areas including civil service and State-owned enterprises (SOE) reforms has picked up pace. The ADB has provided technical assistance in the area of SOE reforms.

Fiji is aware of the opportunities that lie with increased connectivity with and in Asia. The Fijian Government therefore has focused on developing its telecommunications and transport capacities. The liberalisation of the telecommunications sector has not only improved customer service and uptake of technology but has also provided competitive pricing for telecommunication usage. The national carrier, Fiji Airways commenced direct flights to Singapore in April this year which is in addition to the 4 times a week direct flights to Hong Kong, China which commenced in 2010. Fiji is also connected to North Asia through Korean Airways, which flies 3 times a week from Seoul. The Fijian Government also has a programme to review all its air services agreements with the view to improving capacity and connectivity without compromising the viability of a much-needed national carrier.

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Conclusion To conclude Mr Chairman, there are undoubtedly mutual benefits for the ADB and Fiji in our combined and continued commitment to realising inclusive growth, regional integration and development and poverty alleviation. The ADB is an important and strategic development partner for Fiji and has a strong track record of strategic cooperation with us, and we look forward to further collaboration in order to support sustainable economic development for Fiji and the region.

Thank you Mr Chairman.

FRANCE Philippe Baudry, Temporary Alternate Governor

Mr Chairman of the Board of Governors, President Nakao, Honorable members of Board of Governors, Distinguished guests,

Let me start by extending our warm thanks to the German government and the city of Frankfurt for the excellent organization of this event.

2015 has been an outstanding year for Asian Development Bank and development with the adoption of sustainable development goals and the Paris agreement on climate.

First of all, France wants to recognize ADB’s critical role in the success of COP21 in Paris, as it was the first among multilateral development banks to announce a doubling in climate financing by 2020. In particular, President Nakao’s personal involvement on climate-related matters needs to be outlined. That is why France is fully confident in ADB’s capacity to deliver its climate targets, as well as maintaining climate finance as a top priority of its future long-term strategy.

Almost fifty years after ADB’s inception, this 2030 strategy is very expected by its shareholders. There are still big challenges regarding poverty reduction, post-conflict settlements or disaster risk management in Asia. ADB’s proven track record provides it with a strong legitimacy to build on partnerships with the poorest and most fragile countries in the region. The combination of ADB and ADF’s balance sheets and ADF’s eleventh replenishment will provide the bank with a very strong financial position to do so. Thus, ADB will have full latitude to tackle next decade’s development challenges in Asia.

With the major improvements that have been done in Asia over the past five decades, ADB’s role needs to be adapted. Despite the cyclical slowdown the region is currently experimenting, it has been and remains a model of economic graduation. Thanks to graduation, poverty reduction is not anymore the one and only mandate of the bank. It is also putting forward MDB’s true value added: concentrating on reducing market failures through finance rather than endlessly increase financing volumes. Thus, France calls ADB to set a proposal for a renewed intervention mandate in upper middle-income countries, with a strong focus on climate and private sector financing. As for COP21, ADB has again the opportunity to play a pivotal role by paving the way for its peers.

Overall, such reforms undertaken within ADB will help the Bank to sharpen its comparative advantages, namely in the field of project financing. This will be most useful and welcome in the

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context of the arrival of new actors in the region. There is much to do, and work for everybody. The overall outcome for the region will only be greater, provided that we collectively resist the temptation to lower our time-tested standards, and avoid harmful competition between institutions. On the contrary we should all strive for complementarity, positive and fair collaboration, and a collective work to improve standards, increase efficiency and reinforce developmental impacts.

To conclude, let me assure you that France is fully committed to build on its successful partnership with the Bank, not only as a shareholder, but also a human resources and co-financing provider.

GEORGIA Nodar Khaduri, Governor

Esteemed President Nakao, Fellow/Dear Governors, Distinguished Guests,

Let me start with highlighting achievements made by the Asian Development Bank (ADB) since our Annual Meeting in Baku.

2015 was a record year for the ADB with total project approvals, record disbursement, co-financing surpassing $10BLN for the first time and private sector operations reaching greatest volume.

We welcome ADB’s readiness to cooperate with various development organizations and financial institutions. By working together, we can achieve the best result in a much shorter time.

Although the success achieved by the Bank is evident, Asia is still home of poor population, more than half of the world’s population with inequality and unequal prosperity, lives in Asia. At the same time, the world still presents new challenges to us, especially in the context of a global slowdown of economic growth.

We believe that a reviving economic growth in the countries of operation and worldwide is a Number One objective. We do believe that the Bank will support its countries of operation in overcoming the new challenges. We welcome ADB’s increased operation in the private sector, which is a catalyzer for country development.

Additional resources resulting from the approval of the merger of its concessional and non-concessional lending resources, which goes into effect on 1st January 2017, can catalyze even greater financing, increasing the ADB’s development impact and value added. For this to happen, we have to ensure that activities/reforms/projects suggested by the ADB are in line with its country priorities. The ADB needs to have a strong and targeted approach to support countries in making growth more inclusive. Resources need to be distributed/used effectively and the ADB has to always allow the governments be in a driving sit and always try to accommodate the needs of its countries of operations.

Turning to Georgia, we have a Four-Point Reform Agenda with the following priorities: Facilitating a job creation by further liberalizing business and investment environment.

Just as a demonstration of this policy, let me inform you that from 2017 we will no longer tax the accrued earnings until they are distributed as dividends;

Empowering people by supporting the creation of skills; Strengthening Open Governance by ensuring the inclusive decision-making process and

by introducing a "Single Window Principle" for all government services; Together with the implementation of relevant soft policies, we are investing in a core

infrastructure development.

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As the Agenda is identified we need support for its implementation and expect that the ADB’s activities/actions will be country tailored.

Dear Participants,

In conclusion, let me thank the Government of Germany for hosting the Annual Meeting this year and also thank the management and the entire staff of the Bank for their excellent work.

Thank you.

GERMANY Hans-Joachim Fuchtel, Governor

President Nakao, Fellow Governors, Ladies and Gentlemen.

Now I will change hats. I will now speak to you as Germany’s Governor. Our Meeting is all about “Cooperating for Sustainability.”

We expect the ADF reform to bring a significantly higher lending volume. This will strengthen the Bank’s strategic involvement in counter-cyclical financial policy action, together with the International Monetary Fund and the World Bank. The Bank can help to lead countries to sustainable growth. So we expressly welcome the Bank’s plan to increase its climate finance from three to six billion dollars by 2020.

Development banks like ADB must link public and private financing with sustainability strategies. At present, a lot of cheap money is available because of the low interest rates. This money is looking for investment options. This is a historic opportunity.

In order to boost such efforts, Germany and ADB yesterday launched the Asia Climate Finance Facility. ACliFF has three goals: first, develop projects that are ready for investment; second, improve climate mainstreaming; and third, mobilize private investment. ACliFF will start with at least 100 million dollars in capital. (30 million euros will come from Germany.) We are hoping that this will mobilize up to 500 million dollars in total investments. We hope that some of you will join this initiative.

Vocational training is a key issue for the private sector–and, thus, also for ADB. We have signed a Joint Declaration of Intent on Technical and Vocational Education and Training (TVET). We want to support vocational training for young people and adults. We want to improve the quality of work. We want to increase productivity. To that end, we will increase our cooperation with local and international companies.

Germany considers high environmental and social standards very important. The World Bank is currently reviewing its safeguards. ADB will review its safeguards in two years. This must lead to a stronger focus on core labor standards!

In closing, Mr. President, I would like to expressly encourage you to continue your strong efforts for reforms in the Bank.

These were the comments from the German Governor. Now I will start calling on the other speakers to make their statements.

Thank you very much!

HONG KONG, CHINA Eddie Yue, Temporary Alternate Governor

I would like to thank the Government of Germany for hosting the 49th Annual Meeting of the Asian Development Bank (ADB), and the Management and staff of ADB for the excellent arrangements of the event. I would also like to congratulate ADB for the successful conclusion of the Eleventh Replenishment of the Asian Development Fund, which would provide critical resources to ADB to further its work in poverty reduction in Asia.

ADB is approaching its 50th Anniversary this year. Over the past fifty years, Asia has undergone tremendous development. The economic miracle in Asia, together with the important work of the Bank, have lifted millions of people out of poverty and substantially improved our standard of living. After decades of rapid growth, however, there have been signs that the trend growth of the region is slowing. This reflects, to a considerable extent, supply-side constraints on potential output. In particular, a number of emerging economies in the region have been held back by infrastructure bottlenecks. As I have noted during the past few Annual Meetings, to sustain growth and propel the economy to the next stage of development, boosting infrastructure investment is a top priority for many developing members in the region.

The infrastructure demand in Asia is huge. ADB estimates put the overall infrastructure investment needs of Asia at US$750 billion per annum over the 2010-2020 period. In the meantime, there is no lack of investors interested in infrastructure investment or financing. Despite a generally longer investment cycle, infrastructure projects can offer relatively stable returns and a hedge to inflation. That is why sovereign wealth funds, insurance funds and institutional investors have shown a growing interest in infrastructure investment in recent years.

However, despite this increasing interest in infrastructure investment, there are significant impediments in channeling savings into infrastructure financing in emerging Asia. Put it in the language of bankers, there is a shortage of “bankable” projects, due to lack of a credible public-private partnership (PPP) framework; deficiency in regulatory regime and legal environment for contract enforcement; lack of transparency for monitoring project implementation; and political uncertainty.

The above impediments call for coordinated efforts to facilitate financial intermediation, lower barriers to investment, enhance PPP standards, and improve project governance and delivery. A number of international and regional efforts have been made on this front, including but not limited to the establishment of the Global Infrastructure Hub by G20, the launch of the Global Infrastructure Facility by World Bank, and the setting up of the new Asian Infrastructure Investment Bank focusing on promoting infrastructure development in the region.

To contribute to the concerted efforts by the international community, the Government of the Hong Kong SAR has recently asked the Hong Kong Monetary Authority to establish an Infrastructure Financing Facilitation Office (IFFO). As its name suggests, IFFO aims to provide a platform to bring together key stakeholders, including developing countries,

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multilateral development banks, potential investors and financiers (e.g. private equity funds, sovereign wealth funds, banks etc), project developers such as corporations capable of developing and operating large-scale infrastructure, and professional service providers. Through information exchange, experience sharing and capacity building, we hope to facilitate more efficient and sustainable infrastructure investment flows to developing Asia. IFFO will seek to collaborate with other development partners in the region and so far we have received support from a number of them including ADB. If everything goes smoothly, IFFO will be formally inaugurated this summer. As an international financial and business center in the region, Hong Kong, China has long been playing an active role in supporting infrastructure financing in Asia. By leveraging on our unique position as an IFC, we hope the IFFO initiative will help mobilise private sector financing and bridge the gap between investors and viable projects. We look forward to working closely with our partners in this process. Thank you.

INDIA Arun Jaitley, Governor

Mr. Chairman, Governors of ADB and Heads of Delegations, President Nakao, Ladies and Gentlemen.

First of all, I express my gratitude to the Government and people of Germany for the warm welcome and hospitality.

Global Economic Environment

We meet at a time when the recovery of the global economy remains very modest. Global growth rate projections have been revised downwards. Subdued growth in Advanced Economies, elevated risks faced by Emerging Market Economies, declining trade volumes, tightening financial conditions and volatile capital flows undermine expectations of a robust economic rebound. Though Asia-Pacific region remains a ‘growth engine’ for the world, the Asian Development Outlook 2016 predicts softening in the region’s growth rates from 5.9% projected last year to 5.7% each in 2016 and 2017.

Indian Economy

India continues to maintain high growth rate with rising real incomes and domestic demand and is projected to grow at 7.6% in 2015-16 as compared to 7.2% in the previous year despite decline in exports and two consecutive years of unfavourable monsoons. The growth may accelerate further if the monsoon turns normal and external demand picks up.

The Government is following the approach of ‘Reform to Transform’ through far reaching structural reforms to foster strong and sustainable growth. We have taken several initiatives to boost business climate and improve the ease of doing business by simplifying and rationalizing procedures and implementing progressive tax rules to overcome impediments to investment. We have also liberalised the FDI policy in several sectors and permitted entry through the automatic route in most cases. Creation of infrastructure through public investment has been scaled up. The National Infrastructure Investment Fund has been set up which will further stimulate investment in infrastructure. Initiatives such as Make-in-India, Startup India and Skill India are focused at encouraging innovations, entrepreneurship and job creation. A credit delivery program for micro and small businesses has been introduced through a specially created vehicle that is the MUDRA bank.

Our Government has launched a massive financial inclusion program. More than 200 million bank accounts have been opened for the unbanked persons. The Government is leveraging digital technology to ensure that all eligible persons are included under the direct benefit transfer program. Accordingly, the AADHAAR, a unique identification system with statutory backing, will form the backbone for targeted delivery of financial and other subsidies, benefits and services. To save farmers from losses due to crop failures, a new crop insurance program has been approved with attractive premium rates.

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We are committed to continuing with fiscal rectitude through our medium term fiscal consolidation plan where we plan to bring down the Fiscal Deficit from 3.9% in 2015-16 to 3.5% in 2016-17. The fiscal consolidation will be achieved while increasing expenditure on infrastructure, agriculture and social sectors.

Our Consumer Price inflation rate has declined significantly in recent years and is now much below the double digit rate a few years ago. Inflation for 2015-16 fiscal is expected to be around 5.5 % and will further decline to less than 5% in 2016-17.

We have reduced the burden of corporate taxation for smaller companies. Such tax rationalization will make Indian manufacturers globally competitive. Once implemented, the Goods and Services tax (GST) that integrates taxation nationwide and reduces transaction costs, would provide a significant impetus to growth.

ADF-12 Consultations and India’s Contribution

I am pleased to note that ADF-12 Consultations have been successfully concluded. As part of our commitment to partake responsibility in fostering economic development and poverty alleviation in poorest countries of the Asia-Pacific region, India has increased its contribution from US$30 million in ADF-XI to US$ 40 million for ADF-12.

Towards “Stronger, Better and Faster” ADB

At the last Annual Meeting in Baku, I had said “ADB not only needs to become bigger, it also needs to become better, as a model amongst MDBs”. As the Asia Pacific region tries to navigate its course amidst shifting tides in the global economic environment, ADB’s ability to make valued, timely and effective contribution is also being tested. Our clients expect a quicker response from us. They also look to us for knowledge solutions. As a regional development Bank, ADB has a special role and added responsibilities. Last year, President Nakao had also expressed his resolve towards a “stronger, better and faster” ADB. I would like to compliment him for several initiatives aimed at transforming ADB. While a lot has been done, much more needs to be achieved.

ADB’s Operations

Mr. Chairman, last year I had urged ADB to target twenty billion dollar business by 2020. ADB’s lending and grant approvals in 2015 showed an increase of 20%, reaching US$16.3 billion. Disbursements at US$12.23 billion also showed an increase of about 20% over 2014. However, decline in disbursements under sovereign projects is a cause for concern and needs to be corrected. End to end contracting time seemed to have increased. As a development bank with strong footprints in infrastructure, focus on projects should not get diluted. Business process reforms envisioned under the Mid Term Review of Strategy 2020 need greater thrust and attention. We need flexible and differentiated approach to meet the requirements of diverse group of member countries.

India Operations

India has been closely associated with ADB since its establishment. We have always extended an unequivocal support to ADB and would continue to do so in future. At a bilateral level, India and the ADB share a productive and beneficial relationship. In addition to supporting conventional infrastructure projects, there is progress towards a deeper engagement on

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development of Smart Cities, Industrial corridors, Ports, Renewable Energy, Rail Transport and emphasis on manufacturing and job creation through flagship initiatives of ‘Make in India’, ‘Sagarmala’ and ‘Skill India’. India with its strong legislative and administrative framework, provides ADB an opportunity to try out different approaches towards reforming its business processes and developing client specific solutions.

Regional Cooperation

India's strong and renewed commitment to regional cooperation in South Asia was demonstrated last year with the signing of the Bangladesh-Bhutan-India-Nepal, Motor Vehicle Agreement (MVA). India also initiated the negotiations on the India-Myanmar-Thailand Highway which will boost South Asia's connectivity eastward. ADB has ably supported these processes.

ADB is the lead partner for developing the East Coast Economic Corridor (ECEC) in India. The initial focus on state of Andhra Pradesh has led to the development of the ‘Vizag Chennai Industrial Corridor’ project. ECEC has important implications to connect to global production networks and value chains in ASEAN, in line with our 'Look East' policy.

As part of the shared vision of SASEC 2025, ADB is supporting development of economic corridors in South Asia. We expect ADB to finalise this vision document and start action on the road map for the development of the region.

Strategy 2030

I note that ADB has initiated the process of evolving a new corporate strategy, Strategy 2030, to guide its Operations post 2020. While increasing operations is certainly needed, the real value of ADB’s intervention would be determined by its quality rather than quantity. ADB’s new corporate strategy should focus on becoming an agent for change by supporting innovative and catalytic projects and activities which would otherwise not happen through local intervention.

Merger of the Asian Development Fund loan resources with Ordinary Capital Resources, comes into effect from 1st January 2017. This provides us a historic, but one time, opportunity to meet the growing needs and expectations of our member countries. Resources limitation should not constrain our ambition and operations. We need to continue growing and be increasingly more relevant. Capital increase to enable ADB to meet its objectives in the medium to long term cannot be delayed for too long.

Delegation and decentralization are also needed to be closer to client and be able to respond to their needs effectively and quickly. While some steps have been taken in empowering Resident Missions and in delegating procurement, more needs to be done to truly transform Resident Missions into total solution providers. For example, creating some well-equipped regional hubs at strategic locations can make a significant difference to our response time and quality. Development projects need close monitoring, review and at times, hand holding by development bank.

Mr. Chairman, I conclude with the hope that the wind of change sweeping the region will manifest in transforming ADB into a ‘bigger’ and ‘better’ Bank.

Thank You.

INDONESIA Bambang P.S. Brodjonegoro, Governor

Mr. Chairman His Excellency President Nakao, Honorable Board Members, Fellow Governors, Distinguished Guests, Ladies and Gentlemen,

Good Morning,

On behalf of the Indonesian delegation, I would like to thank the Government of the Federal Republic of Germany for hosting the 49th ADB Annual Meeting. I would also like to thank President Nakao and his management team for arranging this event, as well as for the ADB impressive performance over the past twelve months.

I am delighted to acknowledge ADB’s increasing role and significant contribution to member countries. We have seen notable growth in total project approvals and in the disbursement of project funds over the last year. Against the current challenging global economic backdrop, the approved and disbursed financial support from the ADB has provided positive impacts for the recipient countries to respond appropriately to the global economic slowdown and external shocks.

In line with this, Indonesia supports the merger of Asian Development Fund and Ordinary Capital Resources balance sheet (ADF-OCR). As an innovative approach, I believe this would extend ADB’s lending capacity by an additional 50 percent. Indonesia urges the ADB to ensure good governance and management of the ADF-OCR operation in order to maintain the level of concessionality while still managing the financial performance.

In addition to the above, the successful ADF 12 replenishment is another important ADB achievement. Thus, ensuring resources are available to assist smaller and less developed members to pursue their development agenda. Recognizing the importance of the ADF, Indonesia is pleased to announce that we rejoin the ADF 12 replenishment.

Enhancing financial capacity should be complemented by improving operational capabilities through continuous reforms. We are pleased with the reform progress that the ADB has undertaken in implementing the Midterm Review (MTR). We urge the ADB to continue efforts to improve business processes, including more streamlined procedures, fewer delays for the whole process, and more flexible procurement rules. ADB also needs to be more adaptive to country systems. In my view, delegating more decisions to resident missions will allow for more effective and efficient coordination.

Distinguished Ladies and Gentlemen,

The global economy continues to face uncertain recovery from the 2008 global financial crisis. Emerging economies have been through ups and downs due to external and domestic

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pressures. Accordingly, countries need various financing options to prevent or to overcome crises.

In this regard, Indonesia appreciates the ADB’s response by preparing various financing modalities such as Countercyclical Support Facility (CSF) and Precautionary Financing Facility (PFF). We welcome the CSF focus around providing budget support for countercyclical fiscal stimulus packages to assist countries in responding external shocks and in preventing crises in an immediate and reasonable manner.

We also appreciate the ADB’s efforts to remain a relevant and effective development partner in the region by offering other modalities such as Policy Based Lending/Programmatic Approach, project loans, and Result Based Lending (RBL). We encourage ADB to regularly evaluate the effectiveness of each modality and be more responsive to real issues on the ground.


Last year, the Sustainable Development Goals (SDGs) were adopted, built on the success of the Millennium Development Goals (MDGs). We support the ADB's priority to help accomplish the SDGs, consistent with Strategy 2020, by directing enhanced resources to eradicate poverty and strengthen sustainable development, including to finance infrastructure development. Last year, we witnessed the establishment of another multilateral development bank in this region, the Asian Infrastructure Investment Bank (AIIB). We welcome the AIIB and its primary focus on the development of infrastructure and other productive sectors. We encourage the ADB to explore collaboration possibilities with other multilateral development banks, like the AIIB, to jointly address development financing needs in the region.


Let me take this opportunity to provide an update on Indonesian economy.

Throughout 2015, amid the global economic slowdown, Indonesia achieved a GDP growth of 4.8 percent. Inflation was 3.35 percent. Despite low commodities prices, our trade balance recorded a surplus of USD 7.52 billion, and our current account deficit decreased to 2.1 percent in 2015 from 3.1 percent in 2014. This performance places Indonesia as one of the more robust emerging market economies.

It is very important to acknowledge that the global economy would continue to be volatile in the midst of low commodity prices. For an emerging economies like Indonesia, that means we cannot rely on external sector to promote growth. We have to explore all possible policy tools: fiscal, monetary, and structural reform policies.

Indonesia has embarked on fiscal reforms in 2015. We are conducting tax administration reforms. At the same time, we redirected government expenditures from unproductive gasoline subsidy to more productive infrastructure and social protection spending. For the remaining subsidies, we are working to ensure they are better targeted to the poor and the needy.

In addition, the government has also delivered a series of deregulation packages. Started from September 2015, there are now twelve structural reform packages being implemented. They all are directed to: (1) maintain purchasing power so as to boost consumption, and (2) improve the business climate to promote investment.

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Close coordination with the central bank would allow monetary policy to be set in line with the above fiscal and structural reforms. Since mid 2015 Bank Indonesia has switched to a more accommodative monetary policy, combining the macroprudential, reserve requirement, as well as the policy rate instruments.

It is our belief that the above combination of fiscal reform, structural policies as well as accommodative monetary policy, comprises an ideal policy mix to enhance future growth and prosperity for Indonesian people.


Allow me to end my remarks by thanking the ADB for being one of the most important development partners with Indonesia. We welcome the ADBs continued prioritization of its knowledge sharing programs. These programs provide the framework for countries to learn from others and share best practices in addressing development issues.

I would also like to wish President Nakao and the ADB Management every success as you continue with your hardworks in dealing with more dynamic and more challenging global economic and development agenda.

Thank You

IRELAND Paul Ryan, Alternate Governor

Mr. Chairman Mr. President Honorable Board members Governors Distinguished Ladies and Gentlemen

On behalf of the Government of Ireland, I would like to join colleague members in thanking the Government of Germany for hosting the 49th Annual Meeting of the Asian Development Bank (ADB). I would also like to commend our hosts, along with the management and staff of the ADB, on the professional organisation of the event and the warm welcome shown to us here in Frankfurt. We commend President Nakao on his leadership throughout the year and we assure him of Ireland’s continued support in the time ahead.

Ireland’s Economy I would like to take this opportunity to provide you with an update on Ireland’s economic progress. I am pleased to report that the recovery has gained momentum over the past year. Last year, Ireland was the strongest growing economy in the EU, with GDP expanding by 7.8 per cent. The expansion in economic activity, initially led by the exporting sectors, has broadened with growth now increasingly driven by domestic factors as households and businesses plan for the future with a renewed sense of optimism. We have stabilised our public finances and are making significant progress in bringing the economy back to full employment. Central to this progress has been the restoration of Irish competitiveness which is a pre-requisite for sustainable economic growth. This is particularly the case given the increasing uncertainty surrounding the international economic outlook. As a small open economy, it is essential that we remain a competitive strategically important location for trade and investment as we work to expand our exports and continue to build the foundations for a solid and sustained recovery going forward.

Taking Stock The occasion of the Annual Meeting provides an opportunity to take stock of the events of the past year, progress that has been achieved, and challenges and opportunities which lie ahead. This past year has been a particularly important one with the series of replenishment meetings of ADF 12. These discussions provided us with an opportunity to consider how we can work together to ensure that the Bank can deliver on its strategic mandate in the coming years.

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Strategy 2030 Ireland, along with our Constituency partners, have welcomed the President’s initiative to commence early discussion on the successor to Strategy 2020. It is clear that the ADB’s Strategy 2030 will be of paramount importance, particularly in this changing environment. In light of this, Ireland would welcome a thoughtful review of the bank’s approach to doing business. To work towards this new strategy, it is critical that the ADB seek independent analysis and advice in order to ascertain the Bank’s strengths, weaknesses and advantages. By seeking outside consultation, the ADB could also identify possible institutional improvements.

Inclusive growth should remain priority in Strategy 2030, at present, all ADB projects are counted as contributing to inclusive growth. It is therefore necessary to improve the measurement of inclusive growth and increase the transparency regarding the share of operations that genuinely contribute towards inclusive growth, as opposed to just growth.

Climate Change In the lead up to COP21, the ADB announced that it would be doubling the amount of climate finance being provided from its own resources to USD6 billion. Ireland welcomes the ADB’s response to this call for action, particularly the USD2 billion dedicated to for adaptation. We encourage the ADB to develop a publicly accessible climate strategy for meeting these ambitious goals.

Replenishment Meetings of ADF 12 We embarked on this replenishment (ADF 12) with confidence that real progress had been made during its predecessor, ADF XI. Since the last Annual Meeting in Baku, three replenishment meetings for ADF 12 have taken place in Manila, Kathmandu and here in Frankfurt. These meetings have given Donors the opportunity to express concern regarding matters such as gender inequality and inclusive growth. It is therefore critical that the ADB continues to focus efforts and resources on measures to promote inclusiveness in key pillars such as access to jobs and opportunities. As many of you will be aware, a General Election took place in Ireland in February of this year, with no majority party emerging. Negotiations have taken place to discuss the formation of a government through coalition or by minority government but as of yet, no agreement has emerged. In light of this, though we continue to support the ADB and ADF 12, Ireland is not in a position to pledge in Frankfurt.

Ireland at the ADB We would like to take this opportunity to state that we are very pleased our representation at the Board by our Executive Director David Murchison and his excellent team. During the past year Ireland has continued to play a strong role in policy discussions at the ADB and we look forward to playing an even greater role in the year ahead in conjunction with our constituency colleagues.

We have been guided in our role by Ireland’s policy for international development which was published in 2013. The policy is strongly focused on results achievement and putting learning to use, and it outlines as its priorities the goals of reduced hunger; stronger resilience; inclusive and sustainable economic growth; and better governance, human rights and accountability. Ireland brings to the table a significant level of experience on development and governance matters from other International Financial Institutions and other international fora, and this guides our collaboration with the ADB and with colleagues from other member countries. We look forward to continuing to make an important contribution as we move forward together.

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Looking Forward The coming year will be a challenging one as the Bank forges ahead with its important strategic mandate in an evolving and challenging development landscape. We are encouraged by the Bank’s ambition and achievements thus far, and look forward to working with colleagues from the Bank and member countries in the pursuit of poverty reduction and in ensuring that inclusiveness is further prioritised and firmly embedded across all areas. We wish the President well in moving forward with his work and we assure him of Ireland’s continued support in the time ahead.

ITALY Ignazio Visco, Governor

ADB can be proud of being an important actor in the economic and social development of Asia and the Pacific.

The success of the region is striking in many respects. Given the mandate of the Bank, the most important achievement is undoubtedly the reduction of poverty. Between 1990 and 2012, more than 1 billion people were lifted from extreme poverty.

New challenges

Yet, the outlook is now more challenging. The slowdown of actual and potential output growth rates is a source of concern in Asia. Action is needed at both national and international levels, and ADB can and must be part of it.

Ambitions are also higher. The Sustainable Development Goals, while building on the Millennium Development Goals, go further toward a comprehensive vision of sustainable development, which acknowledges the interconnection of the economic, social, and environmental dimensions of development. The Sustainable Development Goals incorporate a greater focus on quality and equity, in addition to the Millennium Development Goals’ focus on quantitative targets. They are also universal—shared by rich and poor countries alike.

A few days ago, 175 nations signed the new agreement on climate change forged last December in Paris, which hopefully will mark a watershed in the global commitment toward the environment for the benefit of future generations.

A new development financing agenda is gaining traction, with the full involvement of multilateral development banks. New international multilateral players are also joining the existing institutions, thus contributing to the creation of a more diversified financing framework for the benefit of developing countries.

In a nutshell, ADB is facing a profoundly changed economic scenario in a new development environment and within a more articulated development architecture.

This requires a new way of thinking—a new vision of ADB in a changing world. The eradication of poverty, the struggle against economic and social inequality, the creation of good jobs for inclusive economic growth, the building of low-carbon and climate-resilient infrastructure, the definition of new modalities of engagement with upper-middle-income countries and of a new concept of graduation, the foundation of a green knowledge bank—these are only some of the new challenges that ADB will have to cope with.

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Strategy 2030

ADB has started defining its long-term corporate strategy. Strategy 2030 will require a great intellectual endeavor that must lead the Bank in a big leap forward. Anything less will fall short of the expectations of its shareholders and the needs of its clients.

All of this calls for ADB to change significantly.

President Nakao has stated that he wants ADB to be stronger, better, and faster. So do we. We recognize his continuous efforts in this direction, and we congratulate him for the achievements attained under his leadership.

ADB is undoubtedly stronger in perspective. The merger of the ADF resources and ordinary capital resources will lift the financial capacity of ADB by up to 50%, for the benefit of its developing member countries—especially the poorest. Moreover in Frankfurt, donors—including Italy—have reaffirmed their strong support to the ADF.

ADB’s increased financial capacity must now be matched by an increase in high-quality projects. To cope with this challenge, ADB must also become better and learn how to deliver faster.

In consideration of the diversified international matrix for financial support, ADB should more clearly establish and maintain its niche, building on its strength and focusing on sectors where it has comparative advantages and where it is able to add value. Projects in the social field, while highly needed, should be carefully scrutinized. There is no need to expand intervention in new sectors for which the Bank is lacking both a clear mandate and well-established expertise.

To be better, ADB must pay attention to the real development impact of its operations. It needs to put more emphasis on outcome vis-à-vis output. It should aim to create more jobs and more inclusiveness. Thus ADB must work to improve its inclusive growth approach and address the root causes of persistent inequality. Revising its measurement system would contribute to this end. Private sector operations, in particular, must hold more development content: there must be no trade-off between development results and investment profitability.

We appreciate the progress in mainstreaming gender into ADB operations. However, a lot more can be done, especially in energy and transportation projects. In general, diversity considerations should permeate project design at inception.

We also appreciate the shift from the traditional sector characterization to a thematic approach. However, such a modern and holistic vision must be pursued with determination to concretely achieve superior results.

Another fundamental issue is the quest for quality. ADB must seek quality in all aspects of its activities. Quality must come before quantity, especially when considering the pipeline of operations and addressing procurement issues. Reforms toward giving more weight to quality in the selection of consultants and contractors would go a long way in improving ADB operations. Innovative ideas, new technologies, and the transfer of knowledge will strongly contribute to building a better Bank.

Quality also means ADB should be more determined in seeking project sustainability and building a high level of resiliency in its operations, especially in addressing climate change and

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disaster risks and recovery. The general concept of resilience to risks should be systematically embedded into projects.

The same Bank processing “engine” needs more quality. Contract awards and disbursements are not improving because of persistent problems in project readiness and start-up delays. Implementation delays, in particular, average almost 2 years and affect 90% of sovereign operations. The expectation of a higher level of approvals following the ADF–OCR merger will put even more pressure on contract award and disbursement ratios. To address this problem, ADB needs to shift more of its focus and resources from project processing (approvals) to project implementation (disbursement).

The 10-Point Procurement Reform Action Plan is reducing procurement time. On the processing side, however, progress is disappointing. A newly approved package of operational reforms promises to enhance efficiency. But much more is needed. The review of ADB processes should not be a one-off exercise. It should instead be a continuous effort toward a better Bank.

Looking forward

Looking forward, we can ask ourselves as shareholders of ADB whether we need an even stronger Bank, beyond what will be achieved with the implementation of the ADF–OCR merger. It should be clear to all of us that ADB must put into full use the financial capacity that comes from the merger and consider ways to reinforce its balance sheet, including through reviewing its pricing policy.

ADB should also contrive ways to attract more cofinancing and “crowding in” of public and private capital. Risk-sharing instruments, for example, can be effective in this regard.

Being better also means that ADB should pursue a higher volume of investment projects. Budget support loans are certainly an important tool and, if well designed in terms of reforms, can have a large impact. However, they should remain a limited share of total lending. A rise of their ceiling does not seem strictly necessary at this juncture. Consideration should be given to ensure a more balanced distribution of budget support loans across countries.

The Countercyclical Support Facility (CSF) should be retained and strengthened, and we are open to discuss the establishment of a similar facility tailored to the needs of ADF countries, which currently do not have access to the CSF.

However, the use of this instrument should be limited to special circumstances, such as when a severe economic crisis takes hold. Moreover, the IMF should be the main player in this area and strong coordination should take place among interested international financial institutions.

Finally, to become truly better, ADB must put the right people in the right place. It must attract high-quality human resources. A well-structured and transparent organizational set-up should lead to a truly robust merit-based system that is applied across all positions, including top management. We should aim for a more balanced representation of diversity in gender and nationality across hierarchy levels. Recent initiatives such as the workforce and workload analysis, skills audit, talent management are to be commended.

To conclude, in the next months we will be asked to vote in the election of the ADB President. President Nakao has communicated his availability to continue serving in his position for a new 5-year term. We do recognize the remarkable results achieved under his leadership.

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As this is a crucial point in time, we look forward to working on a much needed ambitious agenda, which we hope will enable ADB to be up to the difficult challenges it must face.

JAPAN Taro Aso, Governor

Introduction

Mr. Chairperson of the Board of Governors, Mr. President, Governors, and Distinguished

Guests:

I would like to express my sincere gratitude to the Government of Germany and the citizens of

Frankfurt for their warm welcome.

For the last five decades, the ADB has been leading economic development and poverty

reduction in the Asian region. I would like to share my thoughts on the major challenges facing

the ADB to play a greater role in further developing the region.

Promoting Quality Infrastructure

Improving the quality of infrastructure and enhancing investment in quality infrastructure are

critical to achieve sustainable economic development in Asia. Based on this recognition, Japan

launched in last May an initiative called Partnership for Quality Infrastructure, or the PQI, under

Prime Minister Abe’s leadership, followed by specific actions announced in November.

Under the initiative, Japan established a new trust fund in the ADB to mobilize private sector

investment in infrastructure in March this year. Japan will invest up to 1.5 billion U.S. dollars

through the trust fund over 5 years. Another contribution pledged by Japan includes 40 million

U.S. dollars to the Asia Pacific Project Preparation Facility, or the AP3F, which started its

operation in January this year. In collaboration with the AP3F, Japan will support preparation of

PPP projects and help accelerate mobilization of private finance in infrastructure.

As another major pillar of the PQI, a framework to support public infrastructure projects as a

partnership between the Japan International Cooperation Agency, or JICA, and the ADB was

launched. This framework enables the two institutions to extend strategic and comprehensive

assistance to developing countries. JICA and the ADB will provide up to 10 billion U.S. dollars,

and Japan will also utilize the Japan Fund for Poverty Reduction (JFPR) to provide technical

assistance for project preparation. By supporting project development from the upstream, Japan

will help develop quality infrastructure that fits the actual needs of the developing countries.

As the most important development partner in the region, the ADB needs to pursue policies to

improve the quality of its projects. With this view point, I strongly expect the Bank to strengthen

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measures to incorporate high technologies into its projects, including introduction of

procurement systems that is anchored by the concept of Value for Money.

Establishing a strong institution and skilled human resource pools are also important for the

ADB. In this respect, I strongly support the institutional reforms that President Nakao has been

advancing for effective and efficient business operation. Japan will also work hard to contribute

to the ADB’s operations by making use of its human resources with high technology skills and

experiences. I believe that these efforts will further strengthen the collaboration between Japan

and the ADB, and help promote quality infrastructure in Asia.

The role of ADB and Japan’s Contribution

In responding to the massive needs for infrastructure investment in the region, it is extremely

important that the ADB effectively utilizes its limited resources, taking full advantage of the ADF-

OCR combination which will be implemented in January 2017. I strongly expect that the

quantitative expansion of ADB operations through the balance sheet combination and ADB’s

actions to improve quality of projects will function as the two pillars of the ADB’s infrastructure

initiative.

The 12th replenishment of the Asian Development Fund, or the ADF, will also start from the

beginning of the next year. Since Asia is a region frequently hit by natural disasters and

pandemic diseases, ADF 12 should effectively address these challenges, taking measures to

prevent and respond to the emerging risks. Recognizing these regional challenges and the

importance of assistance to low income countries, Japan will continue to take the responsibility

as the largest donor for the ADF 12.

As a country with abundant experience and knowledge in tackling natural disasters, Japan puts

emphasis on supports to disaster-related sectors. In response to the earthquake in Nepal and

the floods in Myanmar last year, Japan is supporting their recovery through the use of JFPR

projects based on the concept of Build-Back-Better, in addition to our bilateral assistance. Under

the JFPR, we are also supporting projects in the healthcare sector in the Lao People’s

Democratic Republic and Mongolia, and a pandemic risk management project in the GMS

region.

Now that the new global development goals have been identified by the Sustainable

Development Goals, the ADB should work toward revising its new long term strategy looking

into year 2030 by clarifying the challenges facing the region and the ADB. The new strategy

should appropriately reflect responses to emerging risks in the region, such as disaster

prevention and response, regional health security. Since many developing countries are

expected to achieve middle-income-country status by 2020, it is important that the ADB

selectively and strategically engage with middle income countries. Strategy 2030 should also

maintain the ADB’s nature of project-centered institution, while effectively providing program

loans to support developing countries’ structural reforms. Furthermore, it will be necessary to

strengthen measures to respond to economic crises in order to build a crisis-resilient Asia.

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As already stated, the expectation for ADB’s contribution to regional development is increasing

in terms of both quantity and quality. In order for the ADB to play a greater role in this

circumstance, the President’s strong leadership is indispensable. Since his inauguration in April

2013, President Nakao has demonstrated his superb leadership in undertaking various reforms

of the Bank, including the ADF-OCR combination, operational reforms of the institution, and the

policy to double Bank’s climate financing. Taking all these into consideration, I strongly expect

that the ADB continue to contribute to further development of the region under the strong

leadership of President Nakao.

The 50th anniversary of the ADB’s Annual Meetings will be held in Yokohama next year. I am

honored to host this memorable meeting at this juncture when both the Asian region and the

ADB are moving towards the new stage. Yokohama is a city that has been leading Japan’s

development and internationalization since the opening of Japan in the late 19th century;

therefore, I am confident that Yokohama is the most suitable place to discuss our future path

towards the prosperity of Asia. Japan will make our best efforts to host a successful and

memorable meeting in Yokohama.

Thank you.

Building Together the Prosperity of Asia

KAZAKHSTAN Erbolat Dossaev, Governor

Dear Mr. Fuchtel, Dear President Nakao,

Let me express my deep gratitude to the Government and people of the Federal Republic of Germany on behalf of the Government of the Republic of Kazakhstan for the hospitality and excellent organization of the 49th Annual Meeting of the Board of Governors of the Asian Development Bank (ADB). We had an honor of hosting the same event in Astana in 2014, and know it could be challenging to organize an event of this importance and magnitude.

I would also like to take this opportunity to congratulate ADB and the President of ADB personally on the occasion of celebrating the 50th anniversary of the establishment of ADB. Your efforts in promoting strong and sustainable economic growth, controlling the environmental impact, improving the lives of the population globally cannot be underestimated.

Nowadays ADB is one of the leading and most respected international financial institutions and a major financial partner of Kazakhstan.

ADB portfolio in Kazakhstan as of the end of 2015 amounted to $2.1 billion. Since the inception of our cooperation in 1994 ADB provided 28 sovereign loans for the total amount of $4.2 billion, including 83 technical assistance projects amounting to $35.3 million and 8 private sector projects for $455 million in some of the most important sectors of the economy. For instance, ADB has already provided more than $900 million for realization of Western Europe-Western China transit corridor as well as granted credits in amount of $500 million for development of SME.

An important step forward in our collaboration was launch of the Partnership Framework Agreement (PFA) in May 2014. PFA emphasizes promotion of sustainable development and inclusive growth, and sets an important knowledge-development framework for institutional and social transformation. PFA includes 5 projects valued at $1.1 billion USD, including credit lines for SME development, energy efficiency in the region, and construction and reconstruction of infrastructure in the framework of the Center-West and Aktobe-Atyrau-Astrakhan road projects.

Seizing this opportunity, let me express my gratitude to ADB, and the President of ADB personally for his support of our initiatives in the area of economic development and growth, and for providing $1 billion countercyclical loan at the end of last year.

In the context of the “new normal” we are focusing our efforts on building an economy that is more diversified, competitive and sustainable in the face of turbulence in the global markets.

The most comprehensive set of upcoming measures to improve the institutional environment for investors is outlined in Five Institutional Reforms, launched by the President of the Republic of Kazakhstan Nursultan Nazarbayev in May 2015.

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To implement Five Institutional Reforms the government has developed a detailed plan “100 Concrete Steps”. These measures are based on the best practices and policies from the most developed nations, members of OECD.

First of all, in order to improve the effectiveness of the government we will introduce and enforce the principles of meritocracy and transparency.

Second, to enforce the rule of law we will take drastic measures to improve the transparency and accountability of the judicial system, especially when it comes to resolving investment and business disputes.

Third, special emphasis will be made on the reforms in the area of economic growth and development. The Ministry of National Economy, my ministry, is responsible for implementation of reforms in this area. Fifty out of 100 measures in the framework of implementation of Five Institutional Reforms are focused on economic and social development that are overseen by me personally.

To give businesses and investors more space and opportunities, we are taking unprecedented measures to minimize the role of the government in the economy. Labor, commodity, and capital markets will be liberalized. Trade regulations will be removed in many areas and reduced in others.

It is important to mention that we are launching a large-scale privatization program aimed at reducing the state participation in the economy down to 15% by 2020.

The role of the government will be limited to creating a productive, predictable and comfortable environment for businesses and entrepreneurs. Thus, we are taking measures to build stronger principles of conducting monetary and fiscal policies, consistent with the best practices of the developed world. To strengthen the role of businesses and investors we will improve the business ombudsman institute. Moreover, in October 2015 Kazakhstan accepted the New Entrepreneurial Code that is practically a handbook for the business.

To further the goal of Kazakhstan becoming one of the top destinations for foreign investments, we are working on development of the Astana International Financial Centre (AIFC). All business in the AIFC will be conducted according to UK law and settlements and all participants of AIFC will be released from corporate and individual income tax.

We will liberalize our immigration policy to make our labor force more competitive and invite strong professionals to the priority sectors of economy.

Fourth, we pay a lot of attention on building unity and cohesion in the society. Reforms directed at building unity and avoiding social stratification based on economic, ethnic, religious factors are especially important in the context of economic volatility.

Fifth, to support these reforms we will need a strong, transparent and reliable government. Kazakhstan is taking measures to decentralize the process of decision making. Best practices of audit and assessment of the government apparatus will be introduced to improve efficiency and compliance.

To ensure the economic growth required for our country’s joining 30 most developed countries of the world, we are implementing the New Economic Policy "Nurly Zhol" aimed at realization of

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competitive advantages of Kazakhstan, including favorable geographical location and investment climate.

The New Economic Policy will become the main medium-term instrument for large-scale investments in transport, energy, manufacturing, building social, and housing infrastructure.

Our efforts to improve the business and investment climate made Kazakhstan the 41st most competitive country in the world according to the World Bank.

The fact that we joined the World Trade Organization last year is a stark indication of the success of our reforms directed at building a strong and sustainable market economy.

Dear Mr. Fuchtel, Dear Mr. Nakao,

It is difficult to underestimate the significance of our cooperation with the ADB. Thus, we gladly welcome the new ADB Country Partnership Strategy for Kazakhstan for the 2017-2021, directed at supporting development in the priority areas of cooperation, including education, healthcare and infrastructure.

The Government of the Republic of Kazakhstan will be further strengthening our cooperation in the ADB operations in the region by intensifying our involvement in the Central Asian Regional Economic Cooperation program. The implementation of this Program will allow to expand the regional cooperation among all CAREC countries, and continue the implementation of ongoing projects within the economic corridors.

We highly appreciate the cooperation with ADB and strongly believe that this Annual Meeting is an excellent opportunity to discuss the matters of mutual interest.

Thank you for your attention!

KYRGYZ REPUBLIC Kubat Murzaev, Temporary Alternate Governor

Dear Mr. Nakao Takehiko, President of the ADB Dear Mr. Hans-Joachim Fuchtel, Chairman of the Board Governors in the ADB, Dear participants and guests,

It is an honor on behalf of the Government of the Kyrgyz Republic to welcome all participants to the 49th Annual Meeting of the Board of Governors of ADB.

Let me express words of gratitude to ADB and especially to the President, Mr. Takehiko Nakao, and also to the Government of Germany for their warm hospitality and the excellent organization of a large-scale event .

Dear ladies and gentlemen,

The ADB, being a significant and strong financial institution in the Asian and Pacific region, plays a large role promoting social and economic development of our region, gives help to the developing member countries in the achievement of the MDGs, namely: poverty reduction, improvement of conditions and improved quality of life of the people.

The Bank adequately and quickly responds to the calls arising from member countries of ADB, in particular by developing countries because it is difficult for them to overcome difficulties alone. In this regard, it would be desirable to welcome efforts of ADB in use of innovative approaches in response to new calls in the field of development.

For 2017, we are planning combination of ADF and OCR assets, and with confidence will be able to tell that this combination will give new ways of development for the developing members countries of ADB.


Since 2013, the Kyrgyz Republic implemented National Strategy of a Sustainable Development of the Kyrgyz Republic for 2013-2017 in order to solve paramount problem in the next years, to lay the foundation of successful development in the Kyrgyz Republic.

The main objective of National Strategy for 2013-2017 is creation of stable society, increase the standard of living of the population, decrease the level of poverty caused by the accelerated economic growth, improvement of business climate and rule of law and creation of an effective control system.

The ADB’s active participation in the realization of National Strategy once again proves the high importance which is given by the Kyrgyz Republic in cooperation with ADB.

The activity of ADB in the Kyrgyz Republic is based on Country Partnership Strategy for 2013-2017 which priorities goes in a close interlacing with National Strategy to the sustainable development of the Kyrgyz Republic for 2013-2017.

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We do appreciate the prompt attention of ADB to resolve several challenges in developing countries.

It would be desirable to join colleagues of other countries and to express profound gratitude to the President of ADB, Mr. Nakao and all staff of ADB for their persistent work in the past year.

REPUBLIC OF KOREA Yoo Ilho, Governor

Mr. Chairman, Mr. President, Distinguished Governors, and Ladies and Gentlemen,

I would like to extend my sincere gratitude to the government and people of Germany for hosting this wonderful event with kind hospitality.

On behalf of the Government of the Republic of Korea and its people, I would like to express my deepest condolences to the Japanese government and all who were affected by the recent earthquake.

We, like the rest of the global community, stand ready to provide every support necessary.

The Asian Development Bank, which marks its fiftieth anniversary this year, has been a key partner in the development community.

In recent years, however, the development landscape has been changing.

While the incidence of poverty continues to fall, we are still facing entrenched inequality, infrastructure gaps, and environmental risks.

Declining trade, lower commodity prices, and capital flow volatility are adversely affecting the region’s economic outlook.

At the same time, global development agendas are undergoing profound changes.

Last year, the international community adopted the Sustainable Development Goals (SDGs) and reached a new climate deal during the 21st Conference of Parties on Climate Change (COP21).

These new developments call for ADB to redefine its roles and strategies.

In this regard, I would like to make four suggestions about the Bank's long-term plan titled “Strategy 2030.”

First, ADB needs to scale up its capacity to meet new development challenges.

The merger of ADB’s concessional Asian Development Fund (ADF) and ordinary capital resources (OCR) is one of the most significant achievements.

However, the merger itself cannot create much value.

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The ADB should step up its efforts to better serve the needs of recipient countries, especially in priority areas such as "addressing fragile and conflict-affected situations" and "strengthening private sector development."

More specifically, I would like to propose comprehensive operational reform to maximize “development impact.”

The Bank’s programs and projects should focus on “generating tangible output” by: generating more economic opportunities; ensuring broader access to those opportunities; creating more jobs; and expanding social protection to reduce vulnerability.

Second, ADB should strengthen its roles as a “Knowledge Bank.”

I welcome the Bank's recent initiatives in this area, including: strengthening sector and thematic expertise; expanding private sector operations; and advancing development partnerships.

What is required for the Bank in this process is to share expertise and knowledge with client countries rather than simply providing financial assistance.

Given Asia’s unique economic and social context, customized development models should be delivered.

In this regard, I hope that the Bank serves as an “honest broker” by reviewing successful development models in Asia and spreading those best practices.

Building on our growth experience, the Republic of Korea is also expanding its contribution to Asian countries under President Park’s “Four Initiatives for Development Cooperation.”

We are utilizing all available channels including the Republic of Korea trust fund, EDCF-ADB co-financing, and the Knowledge Sharing Program (KSP) so that we can provide a full package of support combining "financial resources" and "knowledge."

In particular, we plan to increase our contribution to the Republic of Korea trust fund to 15 million US dollars this year and will maintain our strong commitment in the future.

Key areas of investment will be infrastructure, energy, and healthcare where the Republic of Korea has secured a competitive edge and sufficient know-how.

Third, the importance of “environmentally sustainable growth” cannot be emphasized enough.

Last year, ADB became the first multilateral development bank (MDB) to commit to a sizable climate finance target as well as the first MDB accredited as an implementing entity to the Green Climate Fund (GCF).

Nevertheless, much more should be done.

We need an innovative mechanism to mobilize climate financing from both the public and private sectors, as well as ensure clients’ access to climate funds, including the GCF.

Moreover, the Bank needs to pay more attention to the advancement of technology, which is essential to reduce emissions and build climate resilience.

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Last but not least, we need to build stronger partnership, which is also reflected in the theme of this year's Annual Meeting: “Cooperating for Sustainability.”

Resolving multilateral issues requires concerted efforts by all stakeholders in the region.

This suggests that the Bank strengthen its partnerships with other development banks like the World Bank and the AIIB, bilateral donors, businesses, and civil society.

I also propose that the ADB reinforce the capacity of functional departments to more effectively tackle complex issues across the region.

Distinguished Governors,

It is great to see that the ADB and its member countries are taking meaningful steps to achieve our common goals.

As a member country, the Republic of Korea is committed to supporting this joint effort.

I hope that my suggestions today can contribute to developing concrete action plans for the ADB's "Strategy 2030."

Thank you very much.

LAO PEOPLE’S DEMOCRATIC REPUBLIC Somdy Douangdy, Governor

Mr. Chairman Fellow Governors Ladies and Gentlemen

It is with great pleasure and honor for me and my delegation to be present here in this gorgeous city of Frankfurt and at the 49th Annual Meeting of the Board of Governors of the Asian Development Bank.

I join my fellow Governors in extending sincere thanks to the Government of Germany and the people of Frankfurt for their warm welcome, gracious hospitality and excellent arrangements. I would also like to compliment President Takehiko Nakao and his dedicated team for arranging this year annual meeting in such a spectacular manner.

Mr. Chairman,

Clouds are now gathering over the global economic outlook. Despite the positive outlook for advanced economies, the weakness in world trade, the sign of tighter external financial condition and economic distress related to geopolitical factors continue to pose uncertainty in the global economy. The global growth rate is expected to pick up, but the recovery will remain cooler than it should be. The revised global GDP projection will stand at 3.5%, which below its 4% in the past on average rate. It is disappointing that the favorable winds from lower oil prices and improving global financial conditions have not given more of a boost to the world economy. Quick adjustments in exchange rates with the US dollar appreciating and weakening of most other currencies have emerged as a new challenge. While growth in emerging market and developing economies is projected to be a bit lower due to lower commodity and the re-balancing in the People’s Republic of China.

Ladies and Gentleman,

In the FY 2014-2015, GDP growth of the economy of the Lao People’s Democratic Republic (Lao PDR) slightly moderated from 7.8% to 7.4% but remained in strong growth supported by the expansion of industrial and service sectors. Inflation has been adjusted to downward trend from the decline in global oil prices and moderation in domestic demand. On monetary front, the Government has taken series of measures including the issuance of tighter regulations on foreign currency management and widening daily exchange movement to allow flexibility in some extent. The stable exchange rate against major foreign currencies will remain as a key priority in order to improve domestic and foreign investors’ confidence and to boost economic output. We also acknowledge the necessity to further build up gross international reserves as cushion against external shocks. Moreover, the Government has implemented the mechanism to assist the domestic revenue collection, strengthening the coordination among the central and local government, among Government and private sectors, disseminating and enforcing the usage of relevant laws and regulations, increasing the monitoring and inspection aspect, and strengthening public debt management.

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Mr. Chairman,

ADB has continually played a major role in our region, which has shown tremendous success and also has deep-rooted problems, from widespread poverty to environmental degradation and rising inequality. In this context, ADB should constantly strive towards expanding its capital base and capacity to lend to its developing member countries, achieving efficiency gains, reaching the success of MDGs as we continue to move forward the new and more challenging goal as Sustainable Development Goals. In this regards, we appreciate ADB’s initiative in the efforts to enhance its own financial capacity in which the Lao PDR had fully supported the resolution on combining ADF and OCR in order to increase the lending capacity to its members. We are encouraged by the fact that the management of ADB has seen the important of the resident missions and to give them even more authority. We also have a robust collaboration with ADB in the private sector. Our ongoing Country Partnership Strategy 2012-2016 with ADB is proven to be fruitful and in that regards, we are preparing the implementation of our 8th National Socio Economic Development Plan 2016-2020 to be in alignment with ADB’s Country Partnership Strategy 2017-2021.

For the Lao PDR, a strong and growing ADB is our cherished desire. We were honored to welcome President Nakao recently at the 20th Asian Finance Minister Meeting held in Vientiane Capital. We are very grateful to ADB for its steady extensive support in various sectors as well as ADB’s plan to help strengthen education, develop economic corridors, enhance transport sector governance, and improve health services delivery.

Ladies and Gentleman,

On behalf of the Government of the Lao PDR, I would like to express our heartfelt gratitude to the Management and staff of the Asian Development Bank, and fellow member countries for the assistance given to the Lao PDR and extend the Government’s continued support to join forces with ADB in realizing substantial development results for the Lao PDR. Let me conclude by wishing this Annual Meeting a great success.

Thank you.

LUXEMBOURG Arsene Jacoby, Alternate Governor

On behalf of Luxembourg, I would like to thank the Government of Germany for hosting the Asian Development Bank’s 49th Annual Meeting and the people of Frankfurt for their warm welcome.

Multilateral institutions are key in helping to address global challenges. Gatherings, like the annual meetings of Asian Development Bank Governors, offer a unique opportunity to discuss global responses to global threats. Indeed, terrorism, pandemics, climate change, migration and refugees crises require a comprehensive and cooperative policy response.

Climate Change

Climate change, in particular, has been recognized by multilateral development banks as one of the major challenges to be tackled in order to reduce inequalities and promote environmentally sustainable development. Climate change severely impedes efforts to fight poverty. In rapidly urbanizing and fast growing Asia, green growth strategies and smart cities will be crucial to curb greenhouse gas emissions, thereby fighting one of the root causes of climate change. Luxembourg therefore strongly endorses the Asian Development Bank’s decision to double annual climate financing to USD 6 billion for the Asia and Pacific region by 2020. ADB has been a trailblazer in this regard and we commend President Nakao’s bodacious move that has convinced fellow multilateral development bank to follow in ADB’s footsteps.

Attaining the climate change objectives, agreed upon at the COP 21, and the Sustainable Development Goals (SDGs) will not be possible without the private sector. The teaming up of governments with institutional investors and asset managers is a key factor to reach these goals. Asset owners and financial institutions are acutely aware of the risks and opportunities associated with climate change and low carbon investing. Investors willing to allocate capital and steering financial flows towards more low carbon, climate resilient activities are easily deterred by the relatively high financial risk that such investments entail. In order to back climate finance projects, private investors want to achieve an appropriate balance between the perceived investment risk and expected returns. Layered impact funds and green bonds have already proven to be efficient and innovative ways to mitigate risk and raise funds by leveraging private financing for climate and environmental programs. In this context, multilateral development banks play a vital role in combatting global warming. Poorer countries rely heavily on their financial assistance and technical knowhow to strengthen resilience to climate change.

Thus, we would like to join other Governors here in pushing the ADB to further increase financial and technical support to assist countries in assessing climate risks and build resilience to climate change and natural disasters.

Connectivity and Regional Integration

Achieving universal Internet access by 2030 is a critical enabler for reaching the SDGs. Internet connectivity is as fundamental to economic development and prosperity as roads, ports, electricity and other more traditional infrastructure. In fact, countries that pair technology

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investments with broader economic reforms are able to reap bigger development benefits. Digital technologies trigger faster growth, create additional jobs, and generate better services. According to a World Bank study, a 10 percent increase in broadband penetration correlates with a 1.3 percent increase in GDP in developing countries. Furthermore, this year’s World Development Report unequivocally shows that universal and affordable access to Internet can boost economic growth across the developing world when accompanied by good Internet policies. Consequently, ADB should stand ready to help countries in their efforts to fully reap the so-called digital dividends.

Beyond virtual reality, geographic connectivity in the form of roads, ports, and the electrical grid, that is the hardwiring, remains of course a vital ingredient to boost growth. Transport connectivity raises regional and sectoral competitiveness and interconnected grids allow for smarter power generation thereby contributing to the green growth agenda. But better connectivity may also help in overcoming fragmentation of landscapes and containing rapid urbanization. We all know that cross-border trade is especially important for smaller economies and landlocked countries. Integrating regions or sub-regions to form larger economic environments may help these countries in unleashing their full growth potential. Luxembourg is a small landlocked country and our experience has taught us that connectivity and regional integration have and will continue to play a key role in our country’s economic success. But even more so, it has allowed us to transcend our physical boundaries and expand our political clout. Finally and most importantly, regional integration is conducive to peace and shared prosperity.

Against this background, we welcome ADB’s continued efforts in support of the economic and financial integration of the Asia and Pacific region, including the recent collaboration with AIIB.

Inclusive Growth and Financial Systems

Economic growth is only sustainable if it is inclusive. The SDGs recognize this and establish a clear link between inclusive growth and financial inclusion. We believe that financial sectors are fundamental for inclusive growth to take place. In today’s world, there are 2 billion unbanked people, mainly in developing countries in Africa and Asia. Most banks and other financial service providers primarily service the wealthy, thereby neglecting the vast development potential of the unbanked.

Without inclusive financial systems, poor individuals will not be able to invest in education, health and enterprises. Financial depth and economic and social development go hand in hand. We need sophisticated and deep financial markets to grow our businesses and take advantage of promising growth opportunities. We need credit institutions and insurance companies that are prepared to lend to small and medium-sized enterprises and provide them the necessary financial space in order to innovate, experiment, grow and create jobs. We need deep and liquid capital markets to bridge the infrastructure gap. Private sector development will not take place without a strong and inclusive financial sector.

Of course these developments need to be properly supervised and structured. Indeed, badly managed financial sector development may generate higher volatility, inefficient intermediation and low effectiveness levels of monetary and fiscal policies. The composition and sophistication of financial sectors matter tremendously in terms of inclusive growth and job creation. As the OECD’s latest work on Finance and Inclusive Growth shows, a positive contribution of the financial sector to inclusive growth hinges upon strong capital buffers, measures to reduce explicit and implicit subsidies to too-big-to-fail financial institutions and tax reforms that promote

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neutrality between debt and equity financing. We therefore will continue our support to ADB in strengthening this crucial sector.

Information and Communication Technologies (ICT)

Mobile and digital technologies are instrumental to provide access to basic financial services to the poor. And, it is highly likely that mobile and digital money will revolutionize the delivery of financial services. Bridging the digital gap is not only vital in terms of financial inclusion and digital dividends. Education and health are other important sectors where ICT will generate lasting development impacts.

Luxembourg is currently piloting SATMED, an open platform for the health community. It is an e-based solution that combines mobile and information technologies permitting the delivery of healthcare services to remote and underdeveloped areas. The technological backbone is provided by emergency.lu, the disaster recovery communications platform created to improve the rapid response capabilities of rescue teams in areas hit by severe natural or human-made catastrophes. ADB should explore the opportunity of a more extensive use of such technologies, in partnership with the private sector, with a view to further enhance its development effectiveness.

MALAYSIA Johari Abdul Ghani, Governor ad interim

On behalf of the Government of Malaysia, please allow me to extend my profound gratitude to the Government of Germany for hosting the 49th Annual Meeting of the ADB Board of Governors in this beautiful city of Frankfurt. I wish also to express my appreciation to Mr Takehiko Nakao as well as the ADB management and staff for their relentless effort in organizing this Annual Meeting.


As we meet today here in Frankfurt, the global economy is confronted with an immensely challenging environment. A slower than anticipated growth in several major economies, the sharp decline in commodity and energy prices, the significant shifts in global liquidity, and the intensified geopolitical tensions are having far reaching and prevalent implications. Even with deteriorating momentum, Asia remains the world’s most dynamic region, accounting for 40 percent of the world economy. Over the few years to come, this region is expected to account approximately two-thirds of global growth.

Going forward, the challenge for global economy is to lift growth trajectories and search for sustainable growth factors that can rebuild economic fundamentals, address structural vulnerabilities and forge new sources of growth. Key is the "sustainability" and strengthening of the growth and development of the world economy.

An important aspect in this process is that economic growth and development, no matter how stellar, will begin to fade when inequality sets in and when income disparities keep on widening. Experience has also shown that financial crisis and economic recession entrenches the cycle of poverty. In the more recent years, the international community has accorded greater attention to addressing this agenda and to achieving more balanced and inclusive growth.

At the UN Sustainable Development Summit last September, the 2030 Sustainable Development Agenda were adopted. It is timely for all of us here to inhale the spirit of the development agenda and let us lend strong motivation to equitable and inclusive development. To eliminate poverty and hunger and achieve equitable, open, all-round and green, clean and lean as well as innovation-driven development, this is not only our shared moral obligation, but will also unlock immense effective demand.


In the recent IMF/World Bank Meeting in April, MDBs are faced with new challenges and increasing expectation among member countries amidst the global economic slowdown. On this note, we wish to commend the ADB continues its efforts to evolve to better respond to the changing global development needs of its members. Given the pressing needs and growing complexities of the development architecture, the ADB must position itself to cooperate and collaborate with other development partners. Old Chinese saying, "The going is difficult when doing it alone; the going becomes easier when doing it with many others."

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Moreover, while there are now a number of Multilateral Development Banks (MDBs) in the market, concerted collaboration is needed as a way to ensure close coordination and clearer distribution of roles and responsibilities. ADB and other MDBs should work together to define their collective role in addressing global demands and financing gap. Furthermore, as a credible institution with the presence of almost 50 years in this Asian region, ADB needs to continue exercising greater leadership role in this region, together in helping member countries addressing development challenges.


Malaysia remains steadfast and supportive towards the role that ADB plays and is looking forward to working closely with ADB and member countries, in pursuit to combat poverty by promoting inclusive growth in the region. In line with the theme of this year Annual Meeting “Cooperating for Sustainability”, Malaysia urged ADB to play much comprehensive role, beyond its traditional approach especially in formulating innovative financing instruments for meeting the challenges associated with developmental issues by taking into consideration that many countries are growing its digital economy and also trying to strike a balance between development and managing climate change.

ADB should leverage its regional experience and comparative strength in many areas which include in private sector development and operation. ADB must be seen as an agent of resource mobilization to enhance private sectors participation for non-sovereign projects especially in gearing up Public Private Partnership (PPP) initiative. ADB’s participation in promoting private sector activities would be of significant importance. Meanwhile, Malaysia is grateful to take note that ADB has launched the Asia Pacific Project Preparation Facility (AP3F) last January in its effort to improve project readiness and make project implementation-ready in PPP. In Malaysia, there are many projects envisioned under various sectorial blue prints and we hope to see more vibrant PPP projects to be financed by ADB.

The establishment of the ASEAN Economic Community (AEC) in 2015 is a major milestone in the regional economic integration agenda in ASEAN, offering opportunities in the form of a huge market of US$2.6 trillion and over 622 million people. As an institution that has been close to ASEAN, ADB’s continued collaboration in helping to materialize the AEC Blueprint 2025 is essential, particularly in providing the necessary Technical Assistance for enhancing regional financial integration, regulatory framework and trade facilitation. The existing initiatives under the ambit of ASEAN and ASEAN+3 such as ASEAN Infrastructure Fund (AIF) and Credit Guarantee and Investment Facilities (CGIF) are few examples that could be further enhanced through smart partnership with ADB.


Our world is changing fast and getting smaller. Our immediate challenge is how to serve our respective national interests. But in light of the global economic situation, we also have to work together to make sure economic gains are broadly achieved. Our challenge now is to seek opportunities to re-energize the growth of our respective country. With our aggregate strength, I believe we can address the challenge we are still facing ever since the global economic crisis.

To conclude, allow me on behalf of the Malaysian delegation, to once again express our sincere appreciation to the Government of Germany for their tireless efforts in making the 49th Annual Meeting of the Board of Governors a memorable one.

MALDIVES Abdulla Jihad, Governor

Mr Chairman, His Excellency Mr Takehiko Nakao, President of ADB, Fellow Governors, Delegates, Distinguished Guests, Ladies and Gentlemen,

Let me begin by conveying the greetings and best wishes of the people and the Government of Maldives to my fellow Governors, at this very special 49th Annual Meeting of the Asian Development Bank. ADB has been our friend, counsel, and partner in development, and I take this opportunity to share our deep appreciation to ADB for its continued efforts towards the economic growth of the country and the region.

The ADB Annual Meeting is a platform for member countries to strengthen partnership amongst themselves and with other development partners. As such, I thank the ADB and the Government of Germany for the excellent arrangements that have been made to make to facilitate this important dialogue.

Ladies and Gentlemen;

Maldives is a small, forward looking developing country, with a vision of becoming a resilient, diversified high income economy in the next decade. Maldives has seen much economic and social progress in the past few decades. Despite a dispersed population, the Maldives has achieved notable development progress through a combination of private-sector-led tourism development and improving public service provision. Maldives has been able to meet most of the Millennium Development Goals, eradicating extreme poverty and hunger, achieving universal primary education, reducing child mortality, improving maternal health, and combating HIV/AIDS, malaria and other diseases.

However, the challenge lies in sustaining this impressive development progress in the long term. The Government faces many challenges in providing necessary services and meeting the expectations of the people. Much investment and financing is required to achieve the objectives of the Maldives’ economic agenda, and we recognize the need to build within the country the capacity and resources to drive development efforts.


Despite all efforts by the Government of Maldives to sustain its development, we will not be able to do so without addressing the issue of climate change. The Maldives’ commitment towards environmental conservation and climate change mitigation continues, unwavering. Despite our limited capacities both technologically and financially, we have embarked on several innovative initiatives to mitigate the impact of climate change on our islands, much of these efforts with the assistance of ADB. Maldives continues to benefit from the ADB’s Strategy 2020 and look forward to continue working together with ADB on this area.

With the National Budget of 2016, Maldives has initiated policies to ensure sustainable growth through addressing climate change issues. As a result of this effort, Maldives was able to make world’s first ever 100 percent solar powered resort, and several new initiatives will be completed

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within the medium term. Maldives has also launched an energy project to promote the use of renewable energy and to divert strategic orientations towards development of energy sector by scaling up the renewable energy programme, preparing an energy outlook and national strategy.

Maldives would like to congratulate the world partners on the Paris Agreement, on global action plan to place the world on track to avoid dangerous climate change by limiting global warming, and look forward to working with our partners to achieve the objectives of the Agreement.

For a country like Maldives, addressing the climate change issue is not an option, but an obligation. We believe environment and climate change needs to be addressed adequately for us to achieve our goal of sustainable growth and development.


ADB's contribution to the development in the Maldives is well recognized. We believe that in order to continue and strengthen our relationship, some efforts need to be made towards increasing the flexibility and efficiency of the Bank’s processes. More efforts need to be made towards designing a customized framework to address the different challenges faced by different countries.

I conclude by thanking the ADB and the people and Government of Germany for the excellent arrangements made for this Annual Meeting.

Thank you.

MONGOLIA Bolor Bayarbaatar, Governor

Your Excellencies, Mr. Chairman, President Nakao, Esteemed Governors, Ladies and Gentlemen,

It is with great pleasure to participate in the Forty-Ninth Annual meeting of the Asian Development Bank held here in the historic and yet vibrant city of Frankfurt. I would like to take this opportunity to extend my sincere gratitude to the Government of Federal Republic of Germany for hosting the Annual Meeting and the warm hospitality extended to all of us.

As both the global and regional economies are experiencing slow economic recovery, uncertainties and vulnerabilities still remain for the emerging markets. Foreign direct investment from developed countries into developing and emerging economies has decreased in the past several years, and prospects of increased financial inflow remain uncertain. Volatility of the commodity market continues to present a serious challenge for natural resource dependent countries in terms of maintaining macroeconomic stability and implementing the Government’s development strategies. To overcome these, countries like Mongolia has taken major policy actions and adjustments including budget restructuring to enhance and promote quality spending, reforms to enhance the effectiveness and sustainability of social welfare, ensure investment friendly climate and support private sector operations.

Over the last 25 years, Mongolian economy has changed drastically, expanded its range of partners from multilateral organizations to world known business moguls, opened up it’s economy to the rest of the world, developing it’s partnership with third neighbor countries and became the fastest growing economy. Despite the current commodity market fallback and other short-term challenges, the gradual economic recovery is expected in response to active and prudent policy reforms. We continue to take policy actions to strengthen the fiscal and monetary policies by improving the legal environment in support of long-term sustainable development, expanding the economy by establishing favorable investment climate and creating an investment platform for foreign investors for the mega projects. We believe that medium and long term prospects of Mongolia are promising. In the near-term, potential GDP growth looks promising as a result of FDI and capital spending on the Oyu Tolgoi Project Second phase.

It is noteworthy to mention that in 2015, we have adopted the Sustainable Development goals. In order to enhance the efficiency the Government of Mongolia has formulated two major policies - Development Policy and Planning Law and Sustainable Development Goals based Mongolia Sustainable Development Vision 2030. We believe these policy papers will be a rudder for sustainable long and medium term socio-economic development. There will be many challenges ahead in implementing the Sustainable Development Goals and the need for both infrastructure development and affordable energy still remain as major challenges in the emerging markets. We believe as we take on these challenges, ADB will continue to play an important role and take necessary measures to support us in the most efficient and effective manner it sees fit.

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Taking this opportunity, I would like to extend my appreciation to President Nakao for his leadership and guidance in the merger of the ADF and OCR as it expands the lending capacity of ADB and enhancing its operations.

It is my pleasure to highlight the 25th Anniversary of our cooperation between the Government of Mongolia and Asian Development Bank. We would like to thank ADB for its close partnership, supporting the key socio-economic sectors such as infrastructure, health and social sectors to meet the growing development needs in Mongolia. We believe the most important success and value of our cooperation lies in the policy level consultations and cooperation in improving the legal environment and introducing systemic reforms.

With this opportunity, I am pleased to invite you to the 12th ASEM Finance Ministers’ Meeting, to be held on 9-10 June in Ulaanbaatar, Mongolia. The Finance Ministers’ Meeting will determine the future partnership between Asia and Europe for prosperous connectivity. We encourage all members to actively participate and provide their fruitful input for future cooperation between Asia and Europe.

In conclusion, please allow me to express my gratitude once again to the Government of the Federal Republic of Germany for their hospitality. As always, we remain thankful to ADB for the continued support for the development of Mongolia and look forward to a strong, efficient and fruitful cooperation in the following years.

Thank you.

MYANMAR Kyaw Win, Governor

Mr. Chairman of the Board of Governors, Mr. President, Governors, Delegates, Distinguished Guests, Ladies and Gentlemen.

I would like to express my sincere gratitude to the Government of the Federal Republic of Germany and the citizens of Frankfurt for their warm welcome. I would also like to congratulate President Mr. Takehiko Nakao and his staff for their impressive performance over the past years.

We have seen the global growth is projected at (3.4) percent in 2016 and (3.6) percent in 2017. Growth in advanced economies is projected to rise by (0.2) percentage point in 2016 to (2.1) percent, and hold steady in 2017. Overall activity remains resilient in the United States, supported by still-easy financial conditions and strengthening housing and labor markets, but with dollar strength weighing on manufacturing activity and lower oil prices curtailing investment in mining structures and equipment. In the euro area, stronger private consumption supported by lower oil prices and easy financial conditions is outweighing a weakening in net exports.

While Asia and the Pacific region is expected to grow at a steady (5.4) percent in 2015-16, remaining the global growth leader. Asia’s growth benefit from relatively strong labour markets and disposable income growth along with the ongoing gradual recovery in major advanced economies. There are also downside risks, which are particularly prominent for emerging market and developing economies, especially the possibility of a sharper slowdown in the People’s Republic of China (PRC) or larger spillovers from the changing composition of the PRC’s demand. In addition, further US Dollar strength accompanied by a sudden tightening of global financial conditions, weaker growth in Japan, and weaker regional potential growth could also dim Asia’s growth prospects.

In the ten member ASEAN area, annual growth is expected to be unchanged in 2016, hitting an average of (4.6)%, and then rising to (5.2)% over the medium term. Real gross domestic product (GDP) growth in Emerging Asia (the ten ASEAN members plus the PRC and India) is expected to moderate to (6.5)% in 2015, slipping to (6.2)% over the medium term (2016-2020).

In this regard, we congratulate President Nakoa, the management for the impressive performance of the ADB, and the Board of Directors for appointing the Mid Term Review of the Strategy 2020 and its Action Plan to enhance the responsiveness, relevance and the effectiveness of the ADB’s operations. We urge the Bank for the effective implementation of the Action Plan. We applause the merging of the Asian Development Fund (ADF) and Ordinary Capital Resources (OCR) to boost the Bank’s financial capacity and expansion of activities. Thus, we look forward to a larger window of opportunities to access to concessional financing to ADF eligible member countries.

Let me now turn to the recent economic development of Myanmar. Real GDP growth rate in 2014/2015 FY hit (8.7)% which was slightly lower than (9.1)% projected in national annual plan of the Government. The share of agriculture, industrial and services sectors to GDP were (27.9)%, (34.4)% and (37.7)% respectively.

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The government is now implementing the last year of First Five Year the National Development Plan for the FY 2015/16. The growth rate for 2015/2016 FY is expected to hike by (8.7) % in the National Annual Plan. The plan will emphasize to improve electricity and water supply, development of agriculture, job creation, the tourism industry, monetary affairs, and the trade and investment sectors.

The economic outlook is favorable led by rising gas production and investment. Inflation remains at risk as increased due to increasing food and rental prices, depreciation of the local currency and supply constraints brought about by the massive floods. The current account deficit is projected to remain broadly stable, while the international reserves of the Central Bank of Myanmar are forecasted to continue to increase in 2015/2016 as foreign inflows intensify.

We thank ADB for its increasing and active support to Myanmar since its re-engagement with the country in 2012. ADB is engaged in the development of rural infrastructure, rural socio-economic development, transport and energy sectors- particularly in electric power generation and distribution, irrigation, urban development, trade and investment climate, promoting Public-Private-Partnership to support regional connectivity through ASEAN Infrastructure Fund with ADB’s large equity share in the Fund, and capacity building and skills development in various sectors including public finance management, public health sector, institutional development, etc.

We highly appreciate ADB’s considerate coordination to support Myanmar in achieving sustainable and inclusive growth with the theme of connectivity (domestic and regional, rural and urban, hard and soft infrastructure) under the country partnership strategy (CPS).

I would like to conclude by thanking President Nakao and his Management Team, the Board of Directors and Staff for the excellent arrangements for this Annual Meeting and the ADB’s performance in 2015. We look forward to continue strong and fruitful partnership between Myanmar and the Bank in years to come.

Thank you.

NEPAL Bishnu Prasad Paudel, Governor

Mr. Chairman, President Nakao, Fellow Governors, Distinguished Delegates, Ladies and Gentlemen!

I congratulate Asian Development Bank (ADB) for having its 49th Annual meeting in Frankfurt, Germany. I apologize for being unable to attend this meeting because of time pressure of budget preparation of next Fiscal Year in Nepal. I wish a grand success of this meeting.

Mr. Chairman,

We understand that the year 2015 remained remarkably crucial for the global community despite unprecedented natural disasters in some of the member countries including Nepal.

The broader development guidelines were set forth together with a new framework of multilateral policy coordination to meet the ever increasing need for development financing. I am sure that these efforts will be helpful in addressing the pertinent issues of social inequality and poverty in the days to come.

We commend ADB for its support to combating poverty and accelerating inclusive economic growth in the Asia-Pacific region. We are confident that the meeting will be able to connect finance and development professionals to exchange ideas and achieve tangible results under the theme "Cooperating for Sustainability".

In the meantime, we greatly acknowledge the crucial role played by ADB in harnessing regional cooperation through investing in regional and sub-regional infrastructure and connectivity projects. Considering the huge resource gap in this area, we expect ADB’s increasing support specially in stimulating private sector development through widening investment in developing member countries.

Mr. Chairman,

I would like to recall the second ADF 12 Replenishment Meeting held in Kathmandu in February this year for selecting and recognizing Nepal as an appropriate venue. I would like to thank President Nakao, for his initiation to set aside two separate special grant funds, one for disaster risk reduction and the other to enhance regional health security for CA countries, and all donors for their generous consensus on these proposals.

In our opinion, the merger of ADF resources with OCR would help strengthening the financial capacity of ADB in view of greater demand for development finance in the region. I believe that this measure will greatly help increasing ADB’s lending capacity. The availability of more resources only will not be sufficient to ensure expected outcome. Institution building and capacity development are also very crucial factors. We have been confronting a low level of utilization of committed resources for the last few years. We need to put a joint effort to reverse this trend, and make sure that the committed resources are fully disbursed and expected results

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are achieved within the stipulated time. I believe, this is a major concern of ADB donors, the recipients, and ADB itself. We, therefore, invite ADB to extend sufficient fund in the area of capacity development and institution building. We also urge ADB to be more flexible in applying different safeguard policies, guidelines and standards, and also delegate sufficient authorities to resident missions.

I believe ADB's initiation in developing a new long-term strategy is a timely intervention to align its operation to new global development context. This not only provides a new set of action plan to implement but also provides an opportunity to improve ADB’s development effectiveness and addresses broader development challenges in the region. However, ADB should further enhance its ability to implement the action plan to support the needs of member countries by maximizing organizational effectiveness and improving business processes.

Mr. Chairman,

Now, please allow me to briefly touch upon the situation of my country. Nepal has not only witnessed paradigm shift in development front, it has also faced devastating earthquake in April 2015 and obstruction on supply of fuel and essential goods for four and half months after promulgation of new constitution on 20th of September 2015. These two incidences have severely affected our economy. While devastating earthquake forced to decline the growth rate by a percentage point and confined to 3.1 percent in 2015, the obstruction on supply chain further impaired growth prospect in 2016.

Nepal has achieved most of the MDG’s targets despite a decade long insurgency and political transition. We are aiming to graduate from Least Developed Country to Developing Country by 2022 and to Middle Income Economy by 2030. Our upcoming budget for fiscal year 2016/17 will be a strong foundation for this purpose focusing also on reconstruction of the damages caused by the devastating earthquake.

Mr. Chairman,

Nepal is a country of immense potential for socio-economic development. We have favorable climate variations and abundant cultural heritage for tourism. Energy, agriculture and tourism areas are our inherent resource base. We are rich in human resources as well. With the right policies, enhanced level of capacity and stable government, I am confident that we can build Nepal a prosperous country within a short span of time by utilizing optimum of our natural and other resources. We look forward to receiving ADB’s continuous support to make our goals a reality.

Finally, I would once again like to express my profound thanks to President Mr. Nakao and the ADB team for their continued dedication to the overall development in the Asia and Pacific region.

Thank you!

THE NETHERLANDS Eric Hilberink, Temporary Alternate Governor

On behalf of the Governor of the ADB for the Netherlands, Ms. Lilianne Ploumen, Minister for Foreign Trade and Development Cooperation, I would like to thank the Government of Germany for hosting this year’s Annual Meeting. I am honored to welcome all members of the ADB family on home soil of the European Union, of which the Netherlands currently holds the Presidency. I also thank ADB Management and staff for the excellent preparations.

[ ADB and the Sustainable Development Goals ]

Last year the international community reached agreement on landmark global commitments which have a direct bearing on the business of the ADB: (i) the Addis Ababa Action Agenda; (ii) the 2030 Agenda for Sustainable Development, and (iii) the Paris Agreement under the United Nations Framework Convention on Climate Change. Taken together, these commitments are crucial to attain inclusive and sustainable growth, while effectively addressing climate change. Key ingredients of this agenda are (a) mobilization and effective use of domestic resources and (b) increased private sector investments.

Together with the other IFIs, the ADB has an important role to play in turning the ambitions of the agreements reached last year, into reality. We congratulate the Bank on last year’s approval of the merger of the lending resources of the ADF with the Bank’s capital. This important achievement is fully in line with the Addis Ababa Action Agenda and the G-20 agenda for an efficient use of MDB capital. We also welcome the Bank’s commitment, made in the run up to the Paris meeting, to double ADB’s business volume in climate finance in the period up to 2020. Such steps place the ADB in a strong position to support implementation of the Sustainable Development Goals in the region in a year that marks the Bank’s 50st anniversary.

The performance of an institution like the ADB should increasingly be measured in terms of the catalytic impact it has on development, through both private and official cofinancing and domestic resource mobilization, and less so in terms of its own lending volumes. First and foremost it should be about the quality of the Bank’s lending. That is not to say that the volume of the Bank's lending is not important, but it will always remain small compared to the enormous needs in financing infrastructure and other sectors in the region.

[ Strategy 2030 ]

Against this background we very much welcome the discussion, started earlier this year, on a new corporate strategy of the Bank for the medium to long run in line with the SDG agenda: Strategy 2030. We expect this to be an open process, analyzing and addressing fundamental developments in the regions, but also carefully identifying the comparative advantages, strengths and weaknesses of the Bank itself. Taking into account outside views and analyses is critical to allow the Bank to take an unbiased look in the mirror.

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At the same time, some issues should be recognized right from the start. Despite tremendous progress made in the last decades, Asia is still home to more than half of the world’s poor. These persistent pockets of poverty are not likely to disappear by simply relying on growth and trickle down effects, especially as inequality is on the rise in many countries. Poverty reduction therefore needs to remain at the heart of the Bank’s mission in the period up to 2030, in order to contribute effectively to the realization of the Sustainable Development Goals. The Bank needs to have a strong and targeted approach to support countries in making growth more inclusive. This does not mean that all ADB operations should serve this agenda, but it does mean the Bank should be ambitious and transparent in determining what part does.

Perhaps the most pressing part of the strategic agenda of the Bank is the further expansion and modernization of its role in the private sector. Clearly the key to growth and stability in Asia is an inclusive, competitive and productive private sector. It is striking that the last update of the Bank’s policy in this field dates back ten years ago. Despite recent growth and successful individual operations, the Bank’s footprint in the private sector remains limited. With a strong focus on a limited number of large operations heavily concentrated in a few large middle income countries, diversification will be difficult. The same is true for its limited risk appetite and constraints for local currency financing. ADB will have to make up its mind about where it wants to go and act accordingly.

Another fundamental challenge in Asia is the enhanced exposure of regions and cities to natural disasters, often linked to climate change. Against this backdrop we strongly welcome the Bank’s intention to scale up its climate adaptation support. Of particular importance is a deeper engagement of the Bank in flood protection. We want to underline that this will require more than just more and bigger loans. It will require a willingness and capacity to engage early in complex and comprehensive projects. This in turn will require working with partners, public and private, with experience and knowledge in the field.

This brings us to the larger issue of the Bank as a knowledge institution. As the Bank is working in a region with a range of middle income countries with increasingly diverse sources of financing, its added value will critically depend on its ability to assist with advanced solutions for specific development challenges. It will not be able to be everything for everybody all the time, so it will have to make choices. This is true not only for ADB’s cooperation with middle income countries, but also for the Bank as a whole. Only by choosing a clear focus will the Bank be able to build up and maintain the required advanced expertise within its own staff to enable it to make a real difference.

As to the modalities of its support the Bank has to make sure it will remain sufficiently attractive for project financing. In our view this remains the core comparative advantage of a regional development bank such as ADB, providing and mobilizing long term finance and knowledge for investment projects in the region. We need to push the envelope – identifying bankable projects with maximum development impact – and set the example of how projects can be done better, in a more sustainable and inclusive way. This should be the Bank’s trade mark. If clients know that the Bank can do this in an efficient way, demand will follow.

This is not to say that we do not value the Bank’s reform driven policy-based lending and effective results-based policy lending. We certainly do, but becoming too dependent on non-project lending would be too high a risk. Moreover, countercyclical budget support that is not reform-driven should remain an exception, only to be used in a situation of a severe global or regional economic crisis and, in such a case, closely coordinated with the IMF.

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It cannot be emphasized enough that the relevance and development impact of the Bank should not be measured by merely looking at the rate of increase of Board approvals. In many instances the Bank’s impact could even grow if it would accept more modest approval volumes, particularly if that would help to enhance quality at entry or project readiness. The same is true for accepting more risky investments, thereby also filling market gaps, and undertaking more complex projects with higher development impact.

Finally, we would like to stress that the Bank’s main assets are its staff members and the skills they bring in to make a genuine difference in the lives of millions of people in the region. At the end of the day this is what it is all about. It is therefore crucial that an open, transparent and merit based recruitment and promotion system is ensured. This should include the most senior staff positions in the Bank.

[ Conclusion ]

In conclusion let me underline that the Netherlands has great confidence in ADB and continues to be firmly committed as an engaged shareholder and partner.

I would like to thank ADB staff and Management together with President Nakao for their unwavering commitment and dedicated work towards building an even more efficient development bank in order to help eradicate poverty in the Asia-Pacific region.

Thank you.

DENMARK, FINLAND, NORWAY, AND SWEDEN Tone Skogen, Governor for Norway

Mr. Chairman, President Nakao, distinguished Governors, ladies and gentlemen,

The four Nordic countries – Denmark, Finland, Norway and Sweden – would like to express their appreciation to the Government of Germany and the city of Frankfurt for hosting the Asian Development Bank’s 49th Annual Meeting. We would also like to thank ADB management and staff for the excellent job they have done in preparing for this event.

Further, we would like to take the opportunity to congratulate ADB for the efficient organization of the ADF 12 replenishment negotiations, successfully completed immediately before this Annual Meeting.

Last year’s summits on Financing for Development (FfD), the Sustainable Development Goals (SDGs), and climate change have to a large extent set the global development agenda for the coming decades. The time has now come to take action.

ADB has impressed us, once again, by taking the lead. Firstly, ADB has been at the forefront in implementing the Addis Ababa Action Agenda, through the ADF-OCR merger. Secondly, it was the first MDB to be accredited as an implementing entity of the Green Climate Fund.

The combination of a new global development agenda, a changing development finance landscape and an Asia-Pacific that is undergoing a rapid transformation and facing persisting challenges underscores the need to redefine ADB’s long-term strategy. The Nordic countries look forward to working with the Bank throughout this process.

From the perspective of the Nordic countries, reducing poverty and inequality must remain ADB’s key strategic objectives. Income disparities are widening and the poorest and most vulnerable continue to be disproportionally affected by conflict and climate change. Addressing gender inequality is also vital. Equality is a human right, but it is also smart economics. Gender equality leads to higher productivity, healthier children and long-term sustainable economic growth and development. We recognise and value ADB’s achievements in gender mainstreaming, and look forward to setting the bar even higher in Strategy 2030.

Secondly, given that it operates in the region most affected by natural disasters, ADB has already gained considerable experience climate change, environment and resilience. The Nordic countries are encouraged by ADB’s decision to double its annual climate financing. ADB now has an opportunity to be at the forefront of efforts to implement the Paris Agreement, by adopting a publicly available plan for putting the commitments into practice. The Bank should use its policy dialogue and financial instruments to assist countries in implementing their Nationally Determined Contributions (NDC’s) and progressively increase the ambition of those. In the long term, the aim should be to ultimately phase out ADB investments in energy that

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contribute to fossil emissions, with the vision of a zero emissions society. We therefore welcome the ambition to scale up support to renewable energy and energy efficiency and encourage the Bank to adopt higher targets that stretch the institution to do even more. We would also like the Bank to assist member states in phasing out fossil fuel subsidies.

Thirdly, when scaling up its private sector operations, we believe the Bank has an important role as a catalyst, by developing financial instruments and market solutions for private investments. We support ADB’s efforts to leverage its resources and pursue its PPP (public-private partnerships) operational plan. Given ADB’s ambitious agenda for its private sector engagement, the Bank should look into enhancing its operational capacity so as to ensure that its private sector operations are given sufficient resources.

Fourthly, good governance and transparency are absolutely essential for securing more inclusive growth and reducing disparities. They are also vital for building a good business climate that will enable companies to invest, grow and create new jobs. Failure of governance is at the root of instability. Improving government capacity, accountability and combating corruption should be at the core of everything ADB does. The Panama Papers also remind us that openness and curbing illicit financial flows are key to mobilising national resources. Well-established tax systems and sound regulations are of utmost importance. We encourage ADB to support the G20 and OECD initiatives in the fight against tax avoidance and against illicit financial flows from developing countries.

In all of this, particular attention must be given to fragile and conflict-affected states. We must seek to prevent fragility, conflict and violence, and be more ambitious in our efforts to address poverty in affected states. This will also require increased resources. Inclusive growth, gender equality, human rights and environmental sustainability are all essential in this context.

ADB has put a great deal of effort into monitoring the results of its operations and the efficiency and effectiveness of its management. We congratulate the Bank on its accomplishments and encourage it to take this work further. As regards project effectiveness, we encourage ADB to improve time performance and sustainability. In terms of organisational management, we urge the Bank to further strengthen its efforts to improve the gender balance among its staff.

Finally, the Nordic countries believe that strong cooperation and partnership with MDBs, UN organisations and other development actors is essential. By working together, you can maximise your strengths. ADB’s recent evaluation of how the Bank works with its partners resulted in important recommendations, which we encourage you to follow.

On behalf of the Nordic countries, we would like to thank ADB for all its good work and the excellent cooperation we have enjoyed.

NEW ZEALAND Bill English, Governor

Good morning Honorable Governors and President Nakao,

Firstly, thank you to the German Government and the ADB for the meeting arrangements.

The Asian region is in the midst of an economic transition that has significantly reduced the number of people in extreme poverty. Today the rate of extreme poverty is 12.5 percent. In 1990 the rate of extreme poverty was over 50 percent. The impact of this change on people’s lives is staggering.

But in more recent times regional economic growth has slowed significantly. While Asia remains a source of dynamism and contributes around 40 percent of global growth part of the economic slowdown is permanent. To address the significant number of people remaining in poverty in our members – more than half the world’s poor - will require renewed reform efforts to remove obstacles to growth.

How well the countries in this region manage these transitions will be central to world economic developments. With implementation of the ADF/OCR merger the ADB can play a larger role in helping countries in addressing these challenges.

To fulfil this promise the ADB will need to push further on implementation of announced reforms. Improvements in terms of timeliness and sustainability – long acknowledged as needing improvement – need to be addressed more forcefully. To ensure that higher lending result in quality development more administrative resources will be needed in the next few years. This will need to be used to address constraints on delivery in smaller Pacific economies. We welcome the President’s leadership on this issue and the commitments made to do better.

We welcome the focus on the more vulnerable economies, including in the Pacific, in the recent replenishment outcomes for ADF 12. Recent events in Fiji reinforce the wisdom of investment that builds in greater attention to resilience. In determining its ultimate contribution New Zealand will closely monitor the impact of those recently announced reforms to improve speed and timeliness of ADB operations.

As the challenges facing the ADB’s membership grow more diverse, the Strategy 2030 provides an opportunity for the Bank to consider a number of issues arising from the changes. For instance, we support the ADB’s continued engagement in upper middle income countries to ensure it remains an effective and relevant regional institution. The challenge for us all is to work out what role the ADB can play effectively in these countries.

Dealing with increased diversity will also require more differentiation among the membership. A new strategy will required renewed attention to those countries and regions – including the vulnerable countries in the Pacific - whose development challenges are unique.

Any strategy will have to provide more of a guide to how the ADB will renew its operations and deliver a timelier and more flexible product offering to its increasingly diverse membership.

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Once again, I say thanks to the ADB management and staff for the work they do. New Zealand is a committed partner to the ADB. We value the role the Bank plays in our region, supporting Asia’s economic transition. We look forward to our continuing contributions as an active stakeholder.

Pacific Developing Member Countries Mark Stephen Brown, Governor for Cook Islands (On behalf of Governors from Cook Islands, Kiribati, Marshall Islands, Federated States of Micronesia, Nauru, Republic of Palau, Papua New Guinea, Samoa, Solomon Islands, Timor-Leste, Tonga, Tuvalu, and Vanuatu)

President Takehiko Nakao, Fellow Governors, Ladies and Gentlemen.

It gives me great pleasure and honor to address the 49th Annual Meeting of the Board of Governors of the Asian Development Bank (ADB), on behalf of the Pacific Developing Member Countries Governors of the Cook Islands, Kiribati, Republic of Marshall Islands, Federated States of Micronesia, Nauru, Palau, Papua New Guinea, Samoa, Solomon Islands, Timor-Leste, Tonga, Tuvalu and Vanuatu. I join my fellow Pacific Governors in congratulating the ADB for their excellent organization of this meeting and our gratitude to the Government and People of Germany, for being such warm and sincere host.

President Nakao, we the Governors of the Pacific Developing Member Countries offer our heartfelt sympathies to the Government and people of Japan for the loss of life and damages caused by the recent earthquake. In a similar vein, we extend our sincere sympathies to the Government and People of Fiji for devastation and loss of lives from Cyclone Winston. One of the strongest El Nino events in recorded history remains entrenched across the equatorial Pacific Ocean. Palau, the Marshall Islands and the Federated States of Micronesia have declared states of emergency as the region struggles with an extreme drought that forecasters warn will not ease for months. These events illustrates the high vulnerability of countries to natural disaster where in the case of tropical cyclones years of development efforts, investment and infrastructure can be wiped out in few minutes if not days. More sadly, lives of people are also at stake given such inherent vulnerabilities. Drought conditions consume development finances and cause extreme hardship for communities.

In this regard, let me delve into the key economic, climatic and social challenges facing Pacific DMCs that were recently discussed by our members at this Annual meeting. To this end, the Pacific Governors have come together in solidarity to consider economic policy options and solutions beyond the national level and to address our diverse yet common underlying development agenda. In this regional endeavor, we will need the support of ADB and other key stakeholders in supporting our development path.

Mr. President, accessing climate change finance has remained the utmost priority of the Pacific Governors over the past few ADB meetings. Hence, we reiterate that Pacific Developing Member Countries need additional financing to keep pace with the additional expenditures for reconstruction and development due to unexpected disasters and ongoing adaptation to climate change. We seek ADB’s support in identifying global climate finance options available to Pacific DMCs and working with us to drawdown on these funds successfully. We do note the need to

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build country systems required to access such financing and all Pacific DMCs are actively working toward it.

Pacific DMCs have also considered an aggregate or omnibus proposal to look at regional and/or multi-country approaches in accessing climate finance. This will ensure that together small Pacific DMCs are able to overcome the diseconomies of scale, appeal to the development partner requirements of far-reaching and wide impact on the lives of people in the Pacific, and attract the best private sector companies and skills to assist in our infrastructure development.

President, the Pacific DMC Governors reiterate that there should not be any segregation between climate and development finance. Demarcation of these financing delinks the long-term development agenda, medium-term national planning and short-term budgeting. This in turn, requires more resources and investment by Pacific Governments and in some cases leads to duplication of work at national and regional level. Therefore, we urge ADB to consider this in their programs and projects for the Pacific DMCs, especially the need to consider adaptation rather than mitigation aspects of Climate Change. This will ensure that we synchronize the planning and associated financing cycles through annual budget appropriations.

Training and capacity building are essential ingredients in accessing climate finance, implementing projects/programs and setting appropriate monitoring and evaluation mechanisms. We request ADB to seriously beef-up capacity building for Pacific DMCs to improve our likelihood to access current pool of global climate funds.

Pacific DMCs are increasingly becoming vulnerable to adverse climatic events and our current prosperity is simply a “house of cards”. One major event, whether it be a cyclone, tsunami and earthquake, can wipe-out our years of hard struggle in achieving whatever we have. This demonstrates our extreme vulnerability to natural disasters. Furthermore, this vulnerability is complemented by ongoing impact of climate change adaptation, which has placed enormous pressure on limited domestic financial capacity and resources.

President Nakao, despite this glaring evidence, our vulnerability and fragility is typically ignored or left out of the modality of development finance disbursements. In this regard, we request ADB to support Pacific DMCs in global fora and financial architecture to embed vulnerability with a view to increase the concessional resources for Pacific DMCs and to step away from a simple GDP per capita measure of development. We request ADB to consider this as part of their mix of lending and grants to Pacific DMCs with long-term repayment options to alleviate debt distress and appropriate debt planning as part of overall macroeconomic stability.

The Forum Economic Ministers Meeting (FEMM) last year discussed the crucial role of development finance in building economic resilience in Pacific DMCs. As a result of the extensive discussions, Pacific DMCs approved the establishment of an independent disaster risk management facility as a natural extension to PCRAFI with support from the World Bank Group and Pacific Island Forum. Recently, the PCRAFI Technical Working Group, which consists of five PCRAFI countries – namely, Cook Islands, Marshall Islands, Samoa, Tonga and Vanuatu, met to establish a regional Foundation with WBG as trustee to a multi-donor trust fund. We acknowledge and commend the Government of Germany in this regard to providing the seed funding and also commend the continued support from Government of Japan during the pilot phase to ensure continuity of the programme. Progress on the new facility is progressing very well and we hope to set-up the new financing facility by August 2016. This facility will be open to all Pacific DMCs to join and support this regional initiative.

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In addition to the PCRAFI, the 2015 FEMM in Cook Islands discussed other long-term options for financing disaster risk recovery and rehabilitation. We understand that ADB has taken lead in developing a contingent credit line for Pacific DMCs. Pacific DMCs need innovative financing mechanisms that suit our needs and yet be flexible enough to account for inherent vulnerabilities, such as susceptibility to adverse climatic events and global economic shocks. We would like to see ADB at the forefront of financial innovation for Pacific countries, which are tailored to the needs of Pacific countries. In this regard, we welcome the decision to focus on Contingent Credit Lines (CCL) for post-disaster recovery.

We welcome the opportunity of our senior officials to discuss the Strategy 2030 recently in Sydney, in particular the New Pacific Approach which is more directed at our circumstances. Lesson learnt from previous Pacific Approaches include more resourcing requirements and more innovation is required if we are to reach our development targets. In this regard we would like to see more of our nationals involved in any up scaling of resourcing.

President, given our limited diversification and narrow economic base, we request ADB to invest more towards the development of Micro, Small and Medium Enterprises (MSMEs) and private sector development in the region. A reasonable private sector development can be a catalyst to greater mobilization of idle funds (or savings) into investment, improve domestic resource mobilization (through direct and indirect tax revenues), and enhance the national welfare and reduce inequality. The development of MSMEs provides a meaningful opportunity for creation of employment and livelihood for the informal sector, especially for economic empowerment of women and youth in the region.

However, financing of private sector in the region remains a key issue. Therefore, we seek ADB’s support in looking at financing options, such as SMEs Credit Guarantee Schemes and scope of angel financing, for Pacific DMCs. Financing options coupled with financial inclusion initiatives can provide long-term gains in improving the macroeconomic performance and building resilience. In addition, ADB should also consider actively participate in the SOE reforms and assist countries in the divestment of SOEs, where requested.

President Nakao, on behalf of all Pacific DMC Governors, I would like to express our sincere appreciation to you and Management of ADB for the on-going support to Pacific DMCs and that we are committed to improve and strengthen partnerships to address the challenges highlighted.

PAKISTAN Mohammad Ishaq Dar, Governor

Mr. Chairman, President Nakao, fellow Governors, distinguished delegates, ladies and gentlemen.

Heartfelt thanks to the Chair and the Government and people of Germany for their warm reception and hospitality in hosting ADB Annual Meeting.

I am happy to extend my deep appreciation to President Nakao and his Management team and staff for making this event a success. I feel privileged to take part in this momentous event and to renew my country’s commitment in realization of ADB’s vision of an Asia-Pacific region that is poverty-free.

Mr. Chairman We meet at a time of much more challenging global environment than previous years. However, developing countries in Asia have shown a consummate resilience than the rest of world. Developing Asia is projected to grow at 5.7% in both 2016 and 2017 down moderately from 5.9% registered in 2015. While the projection is good, this does not allow us to be complacent as there are internal and external challenges in the shape of global headwinds and moderating growth in the People’s Republic of China.

Mr. Chairman Pakistan’s economy has continued to demonstrate resilience to cope with security challenges, continuing war against terrorism and the lingering impact of consistent floods resulting from climate change. Under the present Government of Prime Minister Nawaz Sharif, Pakistan has embarked upon a journey of development to tackle these challenges head-on and within less than three years of assumption of office, our government has achieved impressive results. Macro-Economic stability has been achieved due to a comprehensive reform agenda including structural reforms especially in the field of energy sector coupled with monetary and fiscal discipline. In order to mitigate any adverse impact on the marginalized section of society, expenditure on the social safety net has been enhanced by 280%. The Government has focused on bringing improvement in the real sectors of growth through improvement in agriculture, industrial and service sectors.

These signs of progress are the source of our confidence that Pakistan would soon move to a path of higher sustainable and inclusive growth leading to jobs creation, poverty reduction and improvement in other socio-economic indices.

Prime Minister’s National Health Insurance Program has been launched in compliance with the Government of Pakistan’s commitment to the principle of universal health coverage and to improve access of the socially disadvantaged population to medical services.

Mr. Chairman Based on the progress and achievements made so far, various international think tanks and research groups have recognized Pakistan’s impressive turnaround. Rating agencies have

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raised our economic outlook from negative to stable to positive. Japan’s JETRO has declared Pakistan as likely to be the second choicest place for foreign direct investment.

Mr. Chairman ADB has been a long and trusted development partner for Pakistan. Government of Pakistan highly appreciates the role of ADB in formulation of Country Partnership Strategy (CPS) for the years 2015-19 that will focus on infrastructure development to help attract private investment, improve connectivity, boost productivity, create jobs and provide access to markets and basic public services. ADB’s indicative assistance of US$ 4 billion for the three-years (2016-18) is greatly appreciated.

Mr. Chairman, Regional cooperation and integration is one of the key pillars of ADB's Strategy 2020. Regional connectivity is also one of the seven key elements of Pakistan’s Vision 2025 and therefore, Pakistan seeks to expand its trade and investment links with the region in the east, west and central Asia. In line with this objective, it is a great pleasure for the Government of Pakistan to be the host for holding the Ministerial Conference of CAREC later this year.

Mr. Chairman I would like to conclude by felicitating ADB for pursuing the reform agenda set out in the medium-term review of Strategy 2020 (MTR) for realigning its strategic agenda in light of the emerging development challenges facing the Asia and Pacific region.

Mr. Chairman Under able and dynamic leadership of President Nakao, the merger of OCR and ADF financial resources and other reform initiatives will enhance ADB’s financial capacity and is an innovative and interesting approach to address the Bank’s longer-term sustainability.

We trust that ADB will continue to explore all efforts to make its resources available to its developing member countries at most affordable terms so as to achieve progress that is truly inclusive and meaningful. Indeed, we look forward to a much greater and more fruitful collaboration with ADB. Thank you, Mr. Chair

PHILIPPINES Cesar Purisima, Governor

Chairman Fuchtel, President Nakao, fellow Governors, ladies and gentlemen, a pleasant good morning to all of you.

First, I wish to extend Philippine delegation’s sincere appreciation to the warm reception of the people and immense preparation made by the German government for hosting this year’s Annual Meeting here in Frankfurt.

This year, the Bank prepares for its 50th anniversary. This milestone carries a special significance: we have hosted the ADB headquarters in Manila since its inauguration. In the past few years, the Philippines has been experiencing rapid economic progress, aided by our robust partnership with institutions like the ADB.

The ADB has given its steadfast support as we accelerated infrastructure investments through our Public-Private Partnerships (PPPs) program and invested heavily in our people to reap our demographic dividend, helping us expand our Conditional Cash Transfer (CCT) capacity by almost 9 times to cover what is now 4.62 million households. These are but a few examples of the productive partnership we’ve shared.

Thus for the Philippine delegation, celebrating the ADB’s golden anniversary is especially poignant. Anniversaries likewise call for a moment of reflection and evaluation. As the ADB turns another year, we take stock of what we can do better to serve our members better.

Much has been said about how we are entering the Asian Century, with the continent reclaiming its dominant role in the global economy. In 1990, Asia contributed only a little more than 20% in the world’s GDP growth. In 2014, Asia’s share shot up to around 40 percent, the biggest slice of the pie and far larger than the contributions of the US and the European Union. Asia’s resurgence comes amid widespread uncertainty and volatility in a world still struggling with uneven recovery and divergent policy paths.

With these challenges, the opportunities for more meaningful partnerships with the ADB in the next 50 years are boundless. The ADB has already taken steps to expand its financing capacity by merging Ordinary Capital Resources (OCR) and the Asian Development Fund (ADF) in anticipation of scaled-up operations moving forward.

As economies become more mature and complex however, the need for concessional financing takes a back seat to unfettered access to knowledge and expertise from institutions like the ADB.

Thus, the ADB’s 50th anniversary may perhaps be the best time to consider revisiting its charter and completely redefining its role from being mainly a source of concessional financing—to a renewed, agile, and dynamic institution able to assist members on their country-specific growth requirements, playing larger roles in institutional development, knowledge management, and digitalization.

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For example, we commend the ADB for pursuing development as a knowledge institution. We believe ADB-financed interventions for Developing Member Countries (DMCs) are best packaged with its knowledge products to ensure sustainable capacity development. In the long term, DMCs benefit the most from knowledge transfers, not from the financial assistance. But perhaps we can see more exponential results if the ADB can move from simply engaging country governments with their valued technical expertise to vastly democratizing its knowledge resources with the use of technology.

The presence of new multilateral development banks (MDBs) in the region can be taken as another opportunity for ADB to improve and collaborate. We strongly urge the Management team to continue pursuing product innovations and further collaboration with other MDBs to become more responsive as a development institution. We are encouraged by Management’s proposed organizational reforms to ensure business continuity. Streamlined business operations, continually building on the expertise of staff, maximizing its use of the sector and thematic groups are all integral to making the Bank’s operations more efficient.

Before I close, let me also take a moment to express our deepest sympathy to the people of Fiji who experienced a devastating catastrophe last February—Tropical Cyclone Winston. This reminded me of Super Typhoon Yolanda (Haiyan) which devastated the Philippines in 2013. Catastrophes of this scale and frequency are proof that climate change is indeed the existential challenge many of our DMCs face. It pleases me to note then that the Bank has committed to double its annual climate change financing to $6 billion by 2020.

We encourage the Bank to continue working with the V20 (now V43), the group of the most vulnerable countries to climate change in coming up with viable risk pooling mechanisms, in raising funding for climate change mitigation and adaptation, capacity building, and in generating technical assistance for building a more resilient infrastructure and economy. Doing so will position the ADB to take a more proactive and holistic approach in its climate change initiatives.

I am sure I speak for the entire Vulnerable 20 Group of Finance Ministers when I say that we are counting on multilateral finance and knowledge institutions like the ADB to join us in our fight for survival and shared prosperity.

Climate change is real and is intertwined with the issue of poverty. Together they are the defining challenge of our generation. I look forward to the next 50 years of the Bank at the forefront of the fight against this twin challenges.

Thank you.

PORTUGAL Álvaro Matias, Temporary Alternate Governor

Mr. President, Mr. Chairman, Governors, Ladies and gentlemen and distinguished guests, I would like to begin by expressing my sincere appreciation to the Government of Germany for hosting the 49th ADB's Annual Meeting.

It is with great pleasure that I take part for the second time in the Bank’s Annual Meetings and have again the opportunity to discuss, first handedly, with its shareholders, Management, partners and clients the main themes on the institution’s agenda.

I would like to focus my statement on the need for ADB to interiorize into its organizational culture President Nakao’s motto that ADB must become “stronger, better and faster”.

First, ADB has already become stronger since we last met. ‘Galaxy”, the transfer of assets from ADF and OCR balance sheet, provides the Bank with an unprecedented financial muscle, which will materialize into an increase of operations of up to 50%. ‘Galaxy’ will triple ADB’s subscribed capital, thereby reinforcing its lending capacity by an additional USD 2.3 billion annually until 2020. The record level of approvals for 2015 and the work plan for the following years suggest a stronger institution. With ‘Galaxy’, Management delivered on the request by shareholders to be innovative and provided with a solution of such financial architecture that allows ADB to remain relevant as a partner of choice in a region with overwhelming needs for development and project finance. In fact, ‘with Galaxy’, ADB emerged as the ground-breaking multilateral development bank that others follow and look up to.

Second, ADB needs to be better. And being better necessarily means that this very considerable increase in financing capacity needs to be met by a clear, long term framework for resource allocation, in the context of a clear long-term Bank’s strategy. Discussions for a 2030 strategy have already started and its final approval is projected to occur in 2018. This process needs to be inclusive and bring all stakeholders onboard. In particular, some special attention needs to be devoted to the role that ADB will play in Upper-Middle Income Countries, where a more robust framework is needed. In fact, these countries have different needs when compared with the poorer developing countries and benefit from a wider range of sources of financing, both domestically and in the international markets.

Third, ADB also needs to be faster. This is one aspect where improvement is critical. We are aware that Management has made a great effort in reviewing and simplifying internal procedures aiming at cutting, in a sizeable manner, the time spent in the project cycle from project identification to Board approval and first disbursements. Competition in the landscape of development and project financing is strong, not only multilaterally, but also with bilateral and domestic sources of financing. ADB needs to keep moving forward with this agenda.


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ADB has been in the market for almost 50 years now: its value added is clear, its policy dialogue capacity has a long standing and successful record, and its know-how is quite vast. This is of utmost importance – such capital of knowledge and experience is not at reach over the medium-term for any new coming multilateral institution. Therefore, ADB’s role will continue to be critical, particularly in capacity building and technical assistance to borrowers. But efficiency gains are important. Delivery is important. And becoming a greener bank is central if we want to make the difference in the Asia and the Pacific region. In this regard, we congratulate President Nakao for his commitment to double ADB’s investment on climate change, up to USD 6 billion by 2020.

Thank you for your attention.

SINGAPORE Heng Swee Keat, Governor

I thank the Government of Germany for hosting the 49th Annual Meeting of the Board of Governors of the Asian Development Bank (ADB) and President Takehiko Nakao for the excellent meeting arrangements.

When the ADB was established in 1966, Asia-Pacific was one of the poorest regions in the world. Armed with the mandate of promoting regional cooperation and fostering economic development in Asia-Pacific, the ADB has successfully supported transformational regional and sub-regional initiatives through financial and technical assistance, facilitating the advancement of the Asia-Pacific region as a significant growth engine of the world economy.

As the ADB celebrates its 50th anniversary, we are heartened that the ADB continues to look into ways to stay relevant in a rapidly changing Asia-Pacific region, as it formulates its forward-looking plan, Strategy 2030. I would like to suggest three priorities for the ADB to better value-add to the changing landscape.

First, the private sector remains the key engine of growth. To this end, the ADB could step up efforts to crowd in private sector funding. Involving the private sector not only draws in the necessary funds, it also serves to contribute much-valued market expertise and financial discipline to managing infrastructure projects. At the same time, we should continue to invest in the private sector and promote greater non-sovereign operations transactions. This will enable companies to play a central role in economic development, create jobs and reduce poverty. In this regard, private sector operations will gain increasing importance, and the ADB will need to ensure that it optimises its resources and operating model, to ensure its effectiveness in this area.

Second, it is important to balance rapid urbanization and sustainability. As a large majority of the ADB’s member countries enters their next phase of economic and social development, the ADB would need to strengthen its focus on providing sustainable urban solutions to help these countries meet future needs and aspirations. The ADB has, very early on, recognised the need to strengthen the capabilities of policymakers in the region to cope with urbanisation. As the rate of urbanisation increases, there will be greater pressure on housing and transport systems, and a greater need to deal with urban problems such as pollution and public health emergencies.

In this regard, we encourage the ADB, as well as research centres and academic institutions, to develop innovative and sustainable solutions to urban problems and to share this knowledge in the region. For instance, the Centre for Liveable Cities (CLC) in Singapore conducts research on urban systems, covering aspects such as water, transport, housing, and integrated master planning, and would be keen to share this knowledge with the ADB and its member countries.

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Third, sustainable financing for these solutions is equally critical. ADB’s inaugural issuance of a green bond is an excellent start to promote the adoption of sustainable financing in Asia. The proceeds of the bond are channelled towards projects that take into account climate change considerations relating to water, energy, transport and other urban infrastructure. To promote greater take-up of green financing, we could work towards establishing a common green bond framework in the region. Developing a common set of principles and policies would lower compliance costs of issuing green bonds and increase participation.

Singapore has built a strong working relationship with ADB since its establishment. We remain committed to working with the ADB and member countries to make impactful and positive contributions in the Asia-Pacific region to build better lives for our people.

Thank you.

SPAIN Javier Sanz, Temporary Alternate Governor

Mr. Chairman, President Nakao, Fellow Governors, Ladies and Gentlemen,

First of all, I would like to thank the Government of Germany for the excellent arrangements made for this 49th Annual Meeting.

Let me also express my deep appreciation to President Nakao and his team for leading the successful merger of OCR and ADF resources. As we have seen during the recent ADF12 negotiations, the transfer has already started to deliver positive outcomes. Resulting from the ADF-OCR combination, Concessional Assistance countries have been granted more funding, whereas donors could lower their contributions -if they wish or have to do so. In the years to come, the capital increase will permit the Bank to expand its pipeline of operations by up to 50%, assuring that ADB can remain a relevant actor for all its partners. This achievement could have a larger development impact as it has shown the way for other Multilateral Development Banks to optimize their balance sheets without compromising their credit rating.

Spain will continue being a trustful supporter of the ADB. I would like to stress that Spain’s shareholding position is very weak due to our late entry in the Bank; Spain would be in a much better position to support ADB if our shareholding position could be further strengthened.

One of the main priorities for ADB in the near future will be to deal with deteriorating economic prospects across Asia. Growth rates in the main economies in the region have moderated and the ongoing economic uncertainties caused by the prolonged low commodity prices have generated significant fiscal pressure on several member countries. In light of this scenario, ADB’s lending policies should strive to leverage real policy changes and create a clear added value of ADB’s intervention. Scarce resources in the Countercyclical Support Facility and the Policy-Based-Lending should be tightly monitored and made conditional in order to ensure recipient countries use them within an adequate policy framework.

The Policy-Based Lending discussion is closely related to the Upper-Middle-Income-Country policy. The importance of the UMICs is critical as the region moves, fortunately, from medium to higher income levels. In this transitional period ADB would need to adapt a new regulatory framework, and its financial toolkit, to accommodate the changing needs of its borrowing members. Overcoming the middle income trap and increasing overall productivity does require more private sector participation. We therefore support ADB in its expansion of the Private Sector Department and the launching of the Public-Private-Partnership Office to contribute to this successful transition.

“Cooperating for Sustainability” -the motto chosen for this Annual Meeting- correctly points out to the great importance of cooperation to tackle Climate Change. The Sustainable Development Goals (SDGs) adopted in 2015 by 193 countries presents an unprecedented opportunity to bring the states and citizens of the world together to embark on a new path to improve the lives of people everywhere.

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In Asia and the Pacific, where natural disasters remain an especially significant threat, the region’s governments, economies, and people need to strengthen their defenses against these events and be prepared to cope with them when they occur. Five out of the 10 countries considered as the most exposed and vulnerable to natural disasters by the World Risk Report in 2014 are ADB Developing Member Countries: Bangladesh, the Philippines, Solomon Islands, Tonga, and Vanuatu.

Spain has been a long-standing supporter of multilateral actions addressing Climate Change impact. We have notably contributed to the fight against climate change with bilateral and multilateral funds, some of them administered by ADB, such as the Clean Energy Partnership Facility and the Water Partnership Facility.

We are therefore very pleased with the Bank’s commitment on climate sustainability. At the United Nations Climate Change Conference, COP21 held last year in Paris, ADB undertook to double its climate change financing from $3 billion per year to $6 billion per year by 2020. Once the framework is set, the challenge rests on its actual accomplishment.

Finally, although some progress has been made on gender equality, there is still room for increasing the opportunities for girls and women to have access to education and jobs. In 2015, ADB has reached its current target of 70% of ADB and ADF operations achieving intended gender equality results. Compared to other MDBs, ADB has made very significant progress when it comes to gender mainstreaming, and deserves recognition for that. However, given that less than a third of ADB’s international staff is comprised by women, Spain would strongly welcome more women joining and working in ADB so as to showcase women empowerment at home.

Looking forward to the upcoming New Corporate Strategy, or so-called Strategy 2030, we should begin discussing now how to continue adapting the Bank’s business model vis-a-vis a continuously changing environment.

Mr. Chairman, President Nakao, Fellow Governors, Ladies and Gentlemen,

ADB promised itself to become a “stronger, better, and faster” institution. We are convinced that the Bank is in the right track to do so. We appreciate the efforts directed at streamlining processes in procurement; at enhancing private sector operations and public–private partnerships; and, in particular, at becoming a knowledge hub for its clients.

SRI LANKA Sandresh Ravindra Karunanayake, Governor

Firstly let me convey greetings and best wishes from the Hon. President, Hon. Prime Minister and the people of the Democratic Socialist Republic of Sri Lanka the resplendent island nation of the Indian Sub-continent.

Chancellor Angela Merkel, the Guest of Honor, President of the ADB, Governors, interim and alternate Governors, Advisers, officials of ADB and Host Country, Your Excellencies, Delegates, it is indeed a privilege and an honor to address you and be present for the second year in succession.

We are assembled here to carry out the onerous task of disseminating the Annual Report, Financial Reports, Budgets for 2016 and related procedural issues of the Asian Development Bank the omnipresent International Financial Institution of Asia. I am sure that the Forty Ninth Annual Meeting will provide the necessary guidance on ADB pertaining to administrative, financial and operational directions.

The countries of the Asian region had gone through numerous travails over the year, both of natural and man-made versions. However, we had managed to weather the worst of such instances, to reach a standard of economic and social significance since of late, and the way forward will be on the path to prosperity. The role of the ADB had contributed immensely to such achievements and I am sure that future contributions will be of additional significance. This is Asia’s century and it is the duty of all nations to reap the benefits of such opportunities in creating the ideal backdrops for accelerated growth.

I wish to convey the condolences of the people my country to people of the Asian region who had faced catastrophic consequences due to mainly natural causes and congratulate the people of nations who had achieved economic growth and social uplifting during 2015.

For Sri Lankans, year 2015 could be termed as an outstanding year. Through a most democratic vote held on the 8th of January a new government surfeit with good governance, laced with transparency was created opening up a new vista of democracy. We had gone through thirty years of protracted civil strife which culminated in 2009, but the expected economic and social prosperity did not unfold due to governance issues, since then.

The resilience of the people of Sri Lanka in the face of economic adversities had been amply demonstrated during the decades of internal strife and a most destructive tsunami which struck the nation creating major collateral damage taking away the lives and livelihoods of many Sri Lankans. We are on the road to prosperity on a platform of good governance and transparency amidst a committed process to achieve national reconciliation and economic freedom. I am sure that Sri Lanka would be a major nation to be part of Asia’s success during this century.

Now we are on the path of progress and the next few years will herald a period of unparalleled economic growth and social prosperity. The guidance, support and assistance of the ADB will enhance and provide the ideal impetus for us reach our goals and objectives in creating a better tomorrow for the people of Sri Lanka.

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However it with much concern and trepidation we have observed the events and evidence unfolding relating to transfer of funds of Asian countries to countries of different continents through illegal and irregular means. Such endeavors create a negative impression on the economies of countries from which such funds are siphoned off and we look forward to the attention of all regulatory institutions to ensure that such operations are curtailed and eradicated. A combined effort by our member nations to counter such endeavors would be most welcome. I also wish to elaborate that such illegal and irregular options could have a critical effect on economies of countries like Sri Lanka unless corrective action is implemented on a priority basis.

The forty ninth annual meeting of the ADB, I am convinced would be a major success creating win-win options to all member countries. Next year will be significant and also be a year of celebration of reaching a fifty year milestone of the ADB annual sessions. ADB has carried out a charted mission with unwavering commitment coupled with aplomb and professionalism. I take this opportunity to thank the President of the ADB and all officials for services rendered in nurturing and uplifting the economies of Asian countries over the years.

The organizers of this annual conference, you have to be complimented for your organizing skills. Chancellor Angela Merkel and people of your great nation we are much thankful for your hospitality as the host nation of this important annual meeting of the ADB.

May the ADB be granted continued opportunity to serve the Asian nations by carrying forward their mission of providing fiscal guidance and funding assistance in creating a continent surfeit with prosperity, de-void of economic hardships and poverty.

Thank you.

SWITZERLAND Raymund Furrer, Governor

Mr. Chairman, Mr. President, Honourable members of the Board of Governors, Distinguished delegates, Ladies and Gentlemen,

On behalf of Switzerland, I would like to express my sincere appreciation to the Government of Germany for hosting the 49th Annual Meeting of the Asian Development Bank (ADB) and the authorities of Hessen and the city of Frankfurt for the excellent arrangements and warm hospitality.

After years of high and sustained growth, the economic and social progress in many developing and emerging countries in the Asian and Pacific region is at risk. The global economic slowdown is threatening to erode development gains in Asia that have lifted hundreds of millions of people out of poverty and largely improved their livelihoods. But the region faces not only a mixed economic outlook, it continuously has to cope with enormous structural development challenges such as remaining or even widening economic and social inequalities, the creation of decent jobs and the improvement of competitiveness, an increase of natural disasters and climate change, or the remaining critical gap in infrastructure.

To address these challenges and to “cooperate for sustainability” in Asia and the Pacific, we need a strong ADB and ensure it has the right mandate for the future.

ADB as a relevant development partner

As a well-established institution in the region, the ADB plays a crucial role in supporting its developing member countries to tackle the aforementioned development challenges. Due to the optimization of its balance sheet, ADB will be able to boost its financial assistance in the years to come and in particular to its less developed members. However, the eradication of poverty can hardly be achieved by public resources only. Switzerland calls on ADB to stay relevant well beyond the financing aspect of its work. Its role in strengthening inclusive growth, the business environment, enhancing the access to finance, and mobilizing private sector capital will be key to unlock the potential of Asian and Pacific economies and bring people out of poverty through the creation of decent jobs and human development.

Under the leadership of President Nakao, ADB is on track to become a stronger, faster and better institution that achieves sustainable results at increasing scale. Switzerland especially appreciates the aspiration to preserve high standards, streamline business and procurement processes, delegate more staff and authorities to resident missions, and to strengthen private sector operations and public-private partnerships. We also welcome ADB’s close coordination with development partners in the region, in particular with the World Bank and the newly

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established Asian Infrastructure Investment Bank (AIIB). Switzerland is convinced that all these efforts will contribute to the success of ADB’s operations in the long run.

Switzerland acknowledges that the ADB has reached with its cofinancing partners a record USD 27.2 billion of operations in 2015. We trust that ADB’s scaling up of operations will help provide its developing member countries with the financing and knowledge they effectively need in order to meet their development challenges ahead. However, ADB’s development footprint on the ground depends largely on ADB’s ability to enhance the quality and sustainability in its operations. Therefore, quality should direct ADB’s strategies and projects, rather than the quantity of annual approvals. This calls also for a stronger focus in ADB’s operations on actual results and an improvement of the current low disbursement rate.

Future role and positioning of ADB

The three global summits in 2015 on Financing for Development (FfD), Sustainable Development Goals (SDG) and Climate Change (COP-21) set the global development agenda for the coming decades. It will be crucial for ADB to align its new strategic directions with these global development initiatives. We invite ADB to take a leading role in implementing these three agendas.

In this context, Switzerland welcomes ADB’s intention to develop a new corporate long-term strategy defining the bank’s role and future positioning in the fast changing development finance landscape. At this early stage, we would like to highlight four issues which shall guide the new strategy 2030:

First, we expect ADB to pursue its vision of an Asia and Pacific free of poverty and to focus on its core mandate. Although the development challenges of the region are vast and manifold, we strongly believe that ADB can make a meaningful difference mainly by focusing its operations to sectors where it has a comparative advantage and is able to add value, such as infrastructure investments in the transport, water or energy sector.

Second, Switzerland encourages ADB to consider differentiated approaches towards its diverse client groups. ADB’s engagement needs to reflect the different contexts in its member countries, ranging from fragile and conflict-affected to stable and rapidly growing situations. In particular, we ask Management to develop also a specific approach to the upper middle-income countries as part of the Strategy 2030 which will guide ADB’s future engagement. To this end, we believe that finance will still play an important but increasingly less vital part in ADB’s operations in these countries, while sharing of innovation and knowledge will become more relevant in the future.

Third, it is Switzerland’s conviction that the reduction of poverty and exposure to natural hazards is inevitably intertwined with tackling the issue of climate change. In this perspective, we very much welcome ADB’s pioneering cooperation with the Green Climate Fund and its early commitment to double its climate-related financing by 2020. This announcement has created expectations and we count on ADB to live up to them by developing a greener portfolio as well as strengthening its focus on disaster risk reduction, climate change adaptation, and resilience. In this regard, we welcome efforts to strengthen collaboration among MDBs and to harmonize their results frameworks and tracking mechanisms.

Fourth, ADB’s investments need to become more inclusive and sustainable. Switzerland calls on ADB to present a convincing revised approach to measure and operationalize inclusive

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growth in its operations and activities. We expect ADB to focus on outcomes and impact, rather than inputs only, and to demonstrate how its interventions will support inclusive growth, especially for poor, vulnerable and marginalized groups. Thus, ADB will have stronger mechanisms in place to help its developing member countries address their development challenges effectively.

Concluding remark

In closing, I would like to thank President Nakao, ADB management and staff for their firm commitment and dedicated work to continue to build a stronger, faster and better ADB to the benefit of Asia and the Pacific region.

TAJIKISTAN Davlatali Said, Governor

Dear Mr. Chairman, Mr. President, Honorable Governors, Ladies and Gentlemen,

I am delighted to have the privilege of addressing the 49th Annual meeting of the Board of the Governors of ADB. I would like on behalf of my delegation and myself, convey my sincere gratitude to the Government of Germany for the gracious hospitality and excellent arrangements. I would also like to complement ADB’s Management and staff for the preparations for this meeting.

We consider this meeting as an important step in strengthening the mutually beneficial cooperation and establish closer relations between Tajikistan and ADB, as well as between countries of the region.

Given the slow and perhaps uneven and modest recovery in the advanced economy, many emerging economy countries continue to struggle to retain and return to respectable growth rate.

Global growth, currently estimated at 3.1 percent in 2015, is projected at 3.4 percent in 2016 and 3.6 percent in 2017. The pickup in global activity is projected to be more gradual than in the October 2015 World Economic Outlook (WEO), especially in emerging market and developing economies. In advanced economies, a modest and uneven recovery is expected to continue, with a gradual narrowing of output gaps. The picture for emerging market and developing economies is diverse and in many cases challenging. Risks to the global outlook remain tilted to the downside and relate to ongoing adjustments in the global economy and a generalized slowdown in emerging market economies.

Turning to Asia, growth in developing Asia softens to 5.7% in 2016 and 2017, from 5.9% in 2015 according to the Asian Development Outlook 2016 and continues to moderate due mainly due to considerable global headwinds and moderating growth in the People’s Republic of China.

In Central Asia growth slowdown is forecast to deepen this year. The average growth plummeted to 2.9% in 2015 from 5.3% in 2014. Plunging petroleum prices, recession in Russian Federation, and weakness in other trading partners have negative impact on the region. Moreover, forecasts of even lower petroleum prices and continued recession in the Russian Federation prompt a projection that average growth in the subregion will slow further in 2016 to 2.1%. Growth is projected to recover somewhat to 2.8% in 2017 on the strength of an improved and somewhat higher petroleum prices.

In an integrated global economy a crisis in the developed countries has negative impact to developing and vulnerable to external shocks countries.

Tajikistan growth decelerated to 6.0% in 2015 from 6.7% in 2014 due to recession in the our main trade partner Russian Federation with declining trade, lower commodity prices, weak private investment, and remittance shortfalls. Other constraints on growth were lower prices for aluminum and cotton, weak private investment and depreciation of the national currency by 31%. Thus inflation slowed, despite the depreciation to 5.1% from 6.1% in 2014, reflecting the drop in

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private consumption, lower global prices for petroleum and wheat, and currency depreciation in our main trade partners.

As forecasted in the ADO 2016 growth is projected to fall to 3.8% in 2016 as recession continues in the Russian Federation and activity remains weak in other trading partners, before recovering slightly to 4.0% in 2017.

2015 was the last year of National Development Strategy (NDS) which defined the priorities and general thrust of government policy, focused on achieving sustainable economic growth, expanding public access to basic social services and reducing poverty in accordance with the Millennium Development Goals. Tajikistan government has achieved NDS’s objective through support of development partners.

Notwithstanding the development gains, numerous challenges remain. Tajikistan has to address its winter energy deficits, food security, and infrastructure needs.

In this regard, we initiated drafting of the new National Development Strategy till 2030 which focuses on ensuring of energy security and energy efficiency, development of communication infrastructure, achieving food security, expansion of productive employment as well as maintaining growth rate, and undertaking structural reforms.

The Asian Development Bank continues to be one of the largest development partners of Tajikistan and has been supportive of the development initiatives taken by the government. Through new Country Partnership Strategy 2016-2020 ADB is expected to play a major role on our developmental priorities.

The merger of Asian Development Fund (ADF) loan resources with Ordinary Capital Resources (OCR) provides an unprecedented increase in ADB’s lending capacity and with the completion of ADF-12 consultations and pledging by donors, we are all set to embark on a new ADF regime.

ADB's Strategy 2020, approved in April 2008, reaffirms both ADB's vision of an Asia and Pacific free of poverty and mission to help its developing member countries improve their living conditions and quality of life. We are pleased to note that significant efforts are being made to put ADB on track to achieve the goals of Strategy 2020. However, much more needs to be done.

As a regional Bank, Members naturally have a greater expectation from ADB to respond to country specific situations. We look upon ADB as our own bank and a reliable partner which would work with us to find country specific solutions to myriad of development challenges being faced by the member countries.

We understand that ADB has embarked on preparing a new corporate strategy, Strategy 2030, to sharpen its corporate directions in order to make tangible development impact in poorest countries of Asia Pacific region. This is welcome. The strategy shift should foster equitable and sustainable economic development amongst member countries. ADB should review and introduce practices that promote capacity building, operational efficiency and concrete development outcomes.

In the coming decade, countries in Asia have to work towards making their economies more resilient to economic shocks, social tensions and natural hazards. They also need to seek private sector solutions to improve development delivery and outcomes. ADB, as a regional multilateral bank, has a pivotal role to plan in this regard.

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ADB has to brace itself to confront new challenges and make valuable contributions for the member countries.

In conclusion, I would like to assure ADB of my Government’s strong commitment to achieving the common goals of poverty reduction, inclusive growth and overall socio-economic development. We also hope that ADB will remain active in realizing our development vision.


TAIPEI,CHINA* Sheng-ford Chang, Governor

Mr. Chairman / Madam Chair, President Nakao, Fellow Governors, Ladies and Gentlemen,

On behalf of the delegation of Taipei,China, I thank the Government and the people of the Federal Republic of Germany for their gracious hospitality extended to us. Frankfurt is a city with a long history and is the home of the Deutsche Bundesbank and the European Central Bank. It is meaningful for the ADB Board of Governors to meet at this largest financial centre in continental Europe. The landscape of the city shows a special blend of modern and traditional architectures. I also join my fellow governors in thanking the ADB staff for their excellent arrangements that make this annual meeting a success.

With the completion of "Strategy 2020," the ADB is launching "Strategy 2030" as its future development policy. Mr. Stephen P. Groff, Vice President of ADB, mentioned at the UN Sustainable Development Summit last year that "ADB applauded the increased ambition of the Sustainable Development Goals (SDGs). We stood ready to support our member countries in achieving these Goals.” Most of these SDGs align with ADB development strategy and projects, such as poverty reduction, gender equality, disaster prevention, climate change, and renewable energy. The theme of the Frankfurt Annual Meeting is "Cooperating for Sustainability," and the topics of "Clean Energy and Climate Change" and "Sustainable Supply and Production Chains” are in response to the theme of supporting sustainable development. We fully support the commitments and efforts of the ADB towards sustainable development; however, as estimated by the United Nations, the cost for promoting these 17 SDGs ranges from $3.3 trillion to $4.5 trillion annually with funding shortfall of $2.5 trillion per year. We are concerned that this deficit may cause a severe challenge to the tax revenue and structure of each country.

While we support the ADB’s investment and financing of sustainable development and climate change-related projects, we also expect that the MTR Action Plan relating to clean energy as well as to sustainable urban transportation systems be implemented effectively. Using the ICT instrument can manage systems functionally. As mentioned in our statement last year we recommend that ADB put more emphasis on ICT projects, such as intelligent transportation systems and energy management systems. By using “Big Data” effectively and efficiently, governments can take precautions against climate change and natural disasters. In Taipei,China, we have built a smart disaster prevention system called "GIS Decision Support System for Highway Disaster Prevention" with the help of “Big Data” on the basis of and the help of cloud computing to integrate governmental information regarding disasters from mountains, bodies of water, roads, bridges, and human beings. The purpose of this system is to provide an alarm in advance through close monitoring and forecast factors such as rainfall, landslides, water level, flooding, etc. With our successful experiences, we are willing to share our knowledge and undergo closer technical exchanges with ADB’s experts in related fields.

* Changed by Meeting Secretariat

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Finance is the foundation of public affairs, and sustainable finance is the basis of sustainable economic development. To build a sound financial mechanism, we have focused on constructing sound finance, practicing social justice, improving economic development, and streamlining administration in recent years. In order to accomplish sustainable finance, we launched “The Sound Finance Program” in 2014 with three pillars: controlling debt scope, restructuring expenditures, and using multiple channels for cultivating government financial resources. The achievements of “The Sound Finance Program” were highly recognized by Fitch Ratings Incorporation, the World Economic Forum, and the International Institute for Management Development. In practicing social justice, we carried out a dynamic tax system adjustment to improve tax fairness and narrow the gap between rich and poor. The Gini coefficient in Taipei,China remained at 0.35 constantly, lower than the international warning line of 0.4. In addition, we adopted tax incentives to stimulate our economic transition, and innovated Customs service to facilitate international trade. For the purpose of improving economic development, we encourage public private partnerships for public construction, and to enhance administrative efficiency, we encourage streamlining of the regulations to protect people’s rights as well as interest.

In the Bertelsmann Stiftung's Transformation Index (BTI) 2016 report, Taipei,China’s Status Index (9.53) and Economic Transformation Index (9.5) were ranked first among 129 transformation economies; our Political Transformation Index (9.55) and Management Index (7.48) were listed as 3rd. In the Economic Transformation Index, Taipei,China’s income distribution is relatively equal. The success of SMEs, electronic and IT technology exports, low inflation, and a stable exchange rate demonstrated remarkable performances in this report. Taipei,China’s public debt is comparatively low by global and regional standards due to prudent fiscal policymaking and resolute debt control. We actively took part in regional and international organizations; therefore, we would like to share this experience with members and extend our help for setting up systems to achieve the ADB’s strategic and thematic emphasis on "Governance and Institutional Capacity."

Citizen supervision is an important measure to enhance governance. The World Bank’s study shows that only a small number of governments provide reliable, accurate, and meaningful open budget data to their citizens and civil society groups. However, in order to monitor governance, there is an increasing demand from citizens and civil society for improved and completed open budget data to further understand the government’s finance operations together with budget implementation. Therefore, providing timely, transparent, and accurate governmental financial data will strengthen the government’s financial responsibility. The World Bank released its latest Financial Management Information System (FMIS) in January 2016, rating the results of 198 economies, and ours was given an “A.” This result shows our efforts in promoting FMIS; thus, the World Bank provided an acknowledgement of our significant achievement. It also demonstrated our efforts in promoting government information disclosures and in improving the effectiveness of government financial management.

To promote gender equality is one of the "Millennium Development Goals” (MDGs). In the "Key Indicators for Asia and the Pacific 2015" released in October 2015, the Asia and Pacific region has made substantial gains in narrowing the gender gap at all levels of education despite the fact that women still face challenges when it comes to high-paying positions. According to the “MasterCard Index of Women’s Advancement 2015,” this was the first time for women in Taipei,China to advance surpassing the 90-point mark since 2007. From the analysis of individual indicators, women in Taipei,China ranked first in "Regular Employment" in Asia and the Pacific region. This achievement fully demonstrates our efforts

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in implementing gender equality. We are of the opinion that there are many aspects of equality cognition to be improved by enterprises and governments in many members through investment and regulations to improve the employment environment, such as to create a friendly environment, to enhance female labor participation, to increase salaries, and to enhance political and social participation. By these measures, women can realize their potentials for improving national competitiveness.

In order to stimulate the economy, to increase inflation expectation, and to evade a rapid appreciation of their exchange rates caused by capital inflows, some countries have adopted a negative interest rate policy recently. However, the results showed that a negative interest rate policy does not effectively promote investment and might cause adverse effects on consumer expenditure. Expansion of a quantitative easing policy and a negative interest rate policy will cause an increase in negative yield bond scope, a decrease in bond liquidity, and a fluctuation in bond price. The negative interest rate policy not only fails to solve the problem of excess liquidity but also weakened the function of banks as a financial intermediary. It shows that a negative interest rate policy does not effectively induce demands; on the contrary, it makes for financial instability and asset price bubble risks. It has been noted that excessive use of monetary policy causes negligence of the importance of fiscal policy and structural reforms. In addition, the implementation of a negative interest rate policy by advanced countries will cause negative spillover effects to small open economies through capital relocation and exchange rate fluctuation. Although a negative interest rate policy is not a traditional monetary tool, in consideration of global and regional financial stability, caution should be paid against its negative effects when such a policy is adopted.

The tax dodges in tax havens not only erode the tax base but also deepen the inequality of income distribution. It will become a potential crisis to national development and social justice. In the globalization of capital markets, it is quite difficult for single countries alone to trace international tax avoidance; instead, it requires the international cooperation. By taking this opportunity, I suggest that our members work together to prevent international tax dodges.

As a means to assist developing countries in meeting their challenges and in turn reach the goals of poverty reduction, private sector promotion, climate change adaptation, and improving governance and capacity, the Asian Development Fund (ADF) 12 Replenishment and the combination of the lending operations of the ADF with the Ordinary Capital Resources (OCR) balance sheet were launched and will take effect in Jan. 2017. We look forward to another new era under the leadership of President Nakao.

Last but not least, I would like to reiterate that Taipei,China is a founding member of ADB and has fully carried out her membership responsibilities. My delegation continues to protest against the unilateral alteration of our membership designation. I would also like to call on members to respect each other concerning the equal opportunities of hosting meetings and workshops of ADB.

I wish this meeting every success. Thank you.

THAILAND Apisak Tantivorawong, Governor

Mr. Chairman, Mr. President, Fellow Governors, Distinguished Guests, Ladies and Gentlemen

It is my great honor to address the 49th Annual Meeting of the Asian Development Bank (ADB) here today in Frankfurt. On behalf of the Government of Thailand, I would like to convey my heartfelt appreciation to the government and the people of the Federal Republic of Germany for their warm hospitality and outstanding preparations for the Annual Meeting this year.

Before I begin, allow me to extend my deepest condolences to the Japanese and the Ecuadorian governments and their people for the loss of lives due to the recent earthquakes in these respective countries. I am certain that the international community, including the Thai government and our citizens, stand ready to do our best to help Japan and Ecuador go through this very difficult time.

Recent Global and Regional Economic Development

Global economic recovery continues, but with ever-increasing uncertainties. Global growth has been slow and became more fragile. Growth in major developed economies has lost momentum while many developing economies are facing falling exports. Sole reliance on exports as growth engine is no longer feasible. In response, governments are trying to prop up domestic demand through expansionary fiscal policy. Accommodative monetary policy has also been employed to support economic growth. From now on, growth will mostly come from within. Some economies are planning to invest more in public infrastructure, not only to crowd in private investment to boost short-term growth, but also to enhance national competitiveness and avoid sluggish growth in medium-term.

Economic Development in Thailand

Let me briefly turn to our country’s economic performance and prospects. The Thai economy has been recovering gradually since the current administration took charge in August 2014. With greater political stability and supportive fiscal and monetary policies, economic growth rebounded. Thailand’s GDP in 2015 expanded 2.8%. This is much higher than 0.8% growth in 2014.

For this year, it seems clear that continuous economic recovery is on the way. The Ministry of Finance estimated that Thailand’s GDP growth this year will be more than 3%. While those economic factors that have been supportive to growth last year will continue to play their crucial roles, there are a few additional factors that have recently emerged as potential supplementary growth drivers. Tourism and public spending will continue to be the main growth engine. Private consumption has shown noticeable improvement. More importantly, fiscal and monetary policies will continue to help support economic recovery.

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In addition, the government has implemented various economic stimulus measures. Among these, investment promotion stands out on top of our list as it is can help boost growth while simultaneously help improve national competitiveness.

As a golden year for investment in Thailand, the government has been trying to further strengthen Thailand’s attractiveness as an investment destination. Ease of doing business in Thailand has been improved. Many appealing privileges, both tax and non-tax, are being offered for immediate investment in 2016 and also for investment in targeted industries such as next-generation automotive, smart electronics, wellness tourism, agriculture and biotechnology, food for the future, robotics, aviation and logistics, biofuels and biochemical, digital, and medical hub, which will be Thailand’s new growth engines.

Not only that we seek to strengthen growth, but we would like to achieve growth with quality. For this reason, we also try to put in place policies to encourage green consumption and green investment in line with the widely recognized Sustainable Development Goals. In 2016, Thailand modified excise tax structure and, among many improvements, excise tax on automobile is now collected based on carbon dioxide emissions rather than engine power.

As for public infrastructure investment, the government has been pushing forward essential investments in both hard and soft infrastructures. The government has a 1.796 trillion-bath investment project in rail, road, air, waterway, as well as intra-city and inter-city transportation system. Investors are encouraged to participate in these large public investment projects through various channels, including Thailand Future Fund and Public-Private-Partnership Fast Track. These investments will create jobs and boost domestic demand in short-run and will help raise national’s economic potential in longer-run.

More importantly, the government is keen on improving nationwide financial infrastructure. The government recently introduced “National e-Payment” master plan to streamline and develop national electronic payment platform. This is a crucial step for Thailand as we aspire to progress towards a more modern economic development in which digital economy is intertwined with traditional economy. People and business will be encouraged to use electronic payment rather than cash through a reduction of cost of paying electronically and also an expansion of access to electronic payment. Likewise, payment to and from government will shift more towards electronic means. Social benefits will be more targeted. This new system will help reduce transaction cost, increase speed and security, while also improve transparency. More importantly, this new system will allow the government to compile useful information about lower-income population. With more a comprehensive and updated database, future social policy will become more targeted and a better social infrastructure will be achieved.

Thailand has made remarkable progress in economic and social development during the past few decades and became an upper-middle income economy in 2011. We were able to move up from a low-income country in less than a generation. In this regard, I would like to use this opportunity to thank ADB for always being Thailand’s partners and support us in our various development endeavors.

From now on, we will continue to further improve our economic development to avoid being trapped in middle-income economy. I strongly believe that the aforementioned strategies of improving ease of doing business, encouraging investment, and upgrading both hard and soft infrastructure of the country are in line with the 2030 development agenda and can propel Thailand’s economic development.

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ADB’s Partnership with Thailand

We appreciate our close partnership with ADB in supporting and focusing on Thailand development challenges including competitiveness, economic reform, inclusive growth and regional cooperation and integration, as well as support in the sub-regional level to enhance inclusive growth and sustainable development path for our Cambodia, Lao People’s Democratic Republic, Myanmar, and Viet Nam, neighbouring countries and the Greater Mekong Subregion (GMS).

Regarding the 2nd country strategic partnership (CPS) which will end this year with many fruitful outcomes, we are working together with the ADB Thailand Resident Mission to develop the new CPS that further strengthen our national as well as regional development agenda.

We recognize our successful projects on the four-lane expansion of the National Highway No 12 from Pitsanulok to Lomsak, which is supported by the ADB. It is a prosperous part of the Greater Mekong Subregion East-West Economic Corridor which will link and create the greater competitiveness position and facilitate economic activities for Thailand’s local provinces along the corridor projects. We also eulogize for our new cooperation, the partnership arrangement between the ADB and Neighbouring Countries Economic Development Cooperation Agency (NEDA), which strengthen our faithfully collaboration on joint development programs to develop our neighbouring countries together. In addition, ADB recently provided the vital technical assistance projects which will help Thailand strengthen its community-based disaster risk management and financial inclusion strategy for low income communities.

We wish the ADB to continue their support for Thailand’s development agenda in achieving inclusive and sustainable growth, in particular, the innovative infrastructure, knowledge advancement and private sector especially SMEs development. We also anticipate the ADB to mainstream the crucial activities and operation in accordance with the global sustainable development goals (SDGs) in that “no one will be left behind”.

TURKMENISTAN Merdan Annadurdyyev, Governor

Mr. Chairman, Mr.President, the Management and Governors of the ADB!

I express our gratitude to you and of course to the German authorities for warm hospitality.

Let me now to say some words about the economic indicators of Turkmenistan.

High rates of growth having been remained already over many years in our country and reflect the main positive result of the economic policy pursued by President of Turkmenistan. Over the period of 2007-2014, the annual GDP growth has stood on average at 10.9 percent.

The year-on-year rate of increase of prices remains within the established limits. Over the period of 2007-2015, the annual increase of the consumer price index equaled on average to 5.58 percent. This fact turned to be the certain promotion of successive attraction of foreign investments to Turkmenistan.

As it is known, according to the UNCTAD World Investment Report for 2012, that year Turkmenistan entered the top ten countries by the index of FDI attraction. The report states that the FDI volume in Turkmenistan accounted for 15.6 percent to the GDP. In most recent years, the volume of investments, in accordance with the national macroeconomic indicators, has expanded 8.6 fold. The similar UNCTAD Report of 2015 showed the expansion of investment volumes in Turkmenistan in 2014.

Like the other countries in the Caucasus and Central Asia region, Turkmenistan was seriously affected by external shocks. Now, it is still facing the challenge of low energy prices. The combined effect of low prices for oil and natural gas with some other obstacles has caused the GDP growth in Turkmenistan to decline to 6.5 percent in 2015, which is still higher rate than in many other countries in the region, but a sensitive drop from 10.3 percent in 2014. In 2016, there may happen another slight slowdown in growth on the background of the broadly stagnant hydrocarbon economy and slowing (albeit still massive) investment. In the short run, these negative factors can be partially offset by strong growth in sectors benefitting from the authorities’ strategy to diversify the economy, strengthen the private sector and put on-stream several major industrial projects linked to vertical integration from natural gas.

In the recent years, Turkmenistan has significantly expanded its cooperation with the ADB. Turkmenistan and ADB performed and perform now a number of projects. For example the North-South Railway Project, which is the first project based on the ADB loan to Turkmenistan that started in August 2011.

The most important and large project, which was mentioned by President Nakao in his opening speech, prepared and being introduced into implementation with active participation of the ADB is Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline construction. In this project the ABD is the transaction`s advisor.

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In line with implementation of particular projects, the ADB arranges and holds successfully in Turkmenistan the seminars, presentations, workshops on various topics within the framework of the technical assistance projects of both national and regional level. In the context of its main goal of reduction of poverty the ADB helps implement infrastructural projects.

Dear Governors, let me take this opportunity and on behalf of the Turkmen delegation request the ADB Management to be more active, together with realization of our national projects, in implementation of our regional projects such as TAPI project on construction of natural gas pipeline and TAP project on construction of power transmission lines. These projects involve significant participation of the ADB and have the aim of assisting the countries-buyers of natural gas or electricity to create new jobs, improve social and living conditions for the population and achieve the stable economic growth.

Today, the commodity prices are low, but we should think of a longer term perspective, how we can use our potential let say after 2020.

I would like to conclude my statement again with our thanks to the management and the staff of the ADB and especially to President Nakao for their pragmatic approach to realization of projects in the member states.


TURKEY Ahmet Genҫ, Temporary Alternate Governor

Mr. Chairman, Mr. President, Governors, Ladies and Gentlemen,

It is my pleasure to participate in the Forty-Ninth Annual Meeting of the Asian Development Bank in Frankfurt. I would like to extend my sincere appreciation to the Federal Government of Germany for this excellent organization and warm hospitality.

Asia has experienced slowing growth. Annual average of growth was decreased to 6.5% during 2011–2015 as comparison to 7.6% during 2001–2010. The projections reflect further decline to 5.7% in 2016 and 2017.

The slowdown in growth poses significant challenges for Asia. High growth is required to eliminate development gaps, reduce unemployment and raise living standards. Considering the region’s megatrends, such as declining share of working age population, increasing urban population, and growing connectedness within and across countries, the region is in urgent need of structural policy reforms to achieve sustainable and inclusive growth.

We are glad that ADB has been operating in recognition of these challenges, displaying efforts to keep its work relevant. With this respect, I would like to underscore three points.

First, as a response to the climate deal at the Paris Climate Conference in December 2015 which commits to keep global warming below 2 degrees Celsius, we appreciate the Bank's Management in setting its climate financing before all other multilateral development banks, at an annual amount of 6 billion dollars. This goal requires additional work for the Bank to be able to support greener, innovative and riskier projects.

In addition, we support ADB’s efforts in integrating its operations to Sustainable Development Goals. Developing Asia’s development agenda remains unfinished with 12.5% of the region’s population living in extreme poverty. I believe that the Bank would play a significant role in this process by helping its members mobilize more resources in order to reach the Sustainable Development Goals. We consider the record level of Bank’s operations of 27 billion dollars in 2015 as a reflection of its commitment and we are glad to see that both approvals and disbursements are on an increasing trend.

Second, while the Bank has scaled up its financing, it has also increasingly deployed non-project lending modalities. These instruments would play important role in supporting structural reforms and as budget supports at certain times of severe crises. However, it is important to define the criteria well for their use and also carry out them in close coordination with the IMF. We expect these modalities to be used in combination of both project lending and technical assistance, further leveraging the reforms of the members.

Lastly, we expect ADB to continue to demonstrate best practices of corporate management. We understand that discussions about preparation of the new corporate strategy, namely the Strategy 2030, have been taking place. We encourage transparent, participatory and meaningful preparation process. As a complementary way we also expect further discussions

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on ADB’s future role and comparative advantage in a changed development landscape rather than continuing business as usual. Moreover, we continue to urge Management for open, transparent, and merit-based human resources policies and practices.

In conclusion, I would like to express Turkey’s strong trust in ADB to continue to be a major development partner for its developing member countries. I am sure that the Bank will continue to adopt best practices with transparent, responsive and results-oriented operations to keep its relevance.

Thank you.

UNITED KINDGDOM Bo Sundstrom, Temporary Alternate Governor

The UK would like to thank the Government of Germany for hosting the Asian Development Bank’s 49th Annual Meeting in Frankfurt and for arranging a wide range of associated events. We also appreciate all the preparatory work done by ADB Management and staff to ensure that the Annual Meeting and the side-events are informative, engaging and helping the Bank to deliver its strategy.

Despite economic growth and poverty reduction in Asia and the Pacific, challenges remain in regards to poverty, inequality, fragility and vulnerability in many countries, especially for countries in conflict affected situations. Many countries also remain vulnerable to natural disasters such as earthquakes, cyclones and floods. ADB continues to play a key role in tackling these challenges as the Bank has a comparative advantage in infrastructure, especially in large-scale projects and often with regional dimensions and benefits.

The UK is pleased that ADB is working hard to deliver on the 2020 Strategy and at the same time thinking carefully and consulting about what kind of priorities and mechanisms the Bank needs to have in the future to respond to the changing realities and demands for its assistance in Asia and the Pacific. A credible and focused strategy for engagement in Asia’s Upper Middle Income Countries must be part of that Strategy.

The UK wants ADB to be stronger on inclusive growth, with a focus on infrastructure and support to make businesses more inclusive in creating jobs and livelihoods for poor and marginalised women and men. The principal driver of delivering sustainable jobs and livelihoods is the private sector, especially small and medium sized companies. We believe the Bank could do more, both by working with partners on targeted interventions for the poorest and most vulnerable, including safety nets, and by harnessing the additional leverage that the private sector could provide, to ensure no one ̶be it man or woman, boy or girl ̶ is left behind in Asia and the Pacific.

We welcome the fact that over the last few years ADB has strengthened its gender policy statements, monitoring capacity and internal incentives on gender. More projects report with a gender focus and the expected rate of gender equality results achieved at project completion has improved. However, we would welcome more systematic evidence of gender impact delivered through ADB’s portfolio as a whole. ADB should also set a better example by appointing more women to its top posts. We will continue to work with the Bank to further improve the gender dimensions of the results framework and the annual reporting on results.

Climate change and environmental concerns are ADB priorities. The UK supports the Bank’s efforts to make sure all projects are “climate smart”, including having good monitoring and learning opportunities. We also welcome ADB’s work with others, including the collaboration with the Green funds and other facilities in the region.

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The UK is pleased that ADB is working in fragile states. The ADF provides an important contribution to addressing conflict and fragility as it channels substantial funds to Afghanistan and other fragile and vulnerable countries. As noted in the 2015 independent ADF evaluation, ADB needs to ensure that country missions in fragile countries have sufficient staff capacity and pay even closer attention to the difficult development contexts in fragile and conflict countries, including stronger assessments of fragility, conflict and the political economy.

We encourage the Bank to take further steps to improve its operational performance. We appreciate that the Bank has developed action plans to improve the quality and speed of project readiness and project delivery, but despite these, many programmes still take too long to demonstrate development outputs. The UK welcomes the Management’s aim to communicate even greater evidence of value for money in its programming and within the organisation. To make that happen, ADB needs to be selective and focus on sectors where it has a strong comparative advantage.

We also encourage the Bank to assess how it could respond even more effectively to the changing demands at country level through a more flexible and competitive blend of loan charges, grants and technical assistance. ADB also needs to remain fit for purpose with a strong front-line engagement at country level supported by streamlined business procedures.

Related to this, it is vital that ADB optimises its use of different lending modalities. It is especially important that non-project lending (Policy-Based Lending, Results-Based Lending and Counter-cyclical Support) are aligned with the policies of the IMF and other international agencies and used to support reforms, not just boost lending volumes.

As discussed during the Asian Development Fund (ADF) 12 Replenishment negotiations, we strongly recommend that ADB’s Management focus on the following three areas:

• Improve project readiness and quality and speed of delivery across the Bank’s operations,• Increase the extent of delegation to, and strengthen resident missions, transferring more

project implementation responsibilities,• Reallocate staff capacity to priority sectors and thematic areas such as fragile states,

inclusive growth and gender within the current workforce plan.

We are pleased that the Bank will soon be able to self-finance all future concessional lending to low-income and vulnerable countries as a result of the forthcoming ADF/OCR merger. But we recognise there is still a strong case for grant funding in the immediate future. The poorest and financially vulnerable countries in Asia and the Pacific face major financial constraints, low domestic revenue, weak capacity and other challenges as they work towards achieving the new Global Goals. There is also a need to support regional public goods; including climate change, resilience to natural disasters and services and regional issues such as health security. The UK is therefore in support of the objectives of ADF 12 for the period 2017–2020.

Finally, given the changing realities in Asia and the Pacific, we welcome further consultations as part of the Bank’s wider forward thinking over the coming year on what kind of mechanisms a future ADF may need to have to be able to respond in an agile and flexible way, and measure and demonstrate results, to future challenges in the poorest and most vulnerable countries in Asia and the Pacific.

UNITED STATES Marisa Lago, Temporary Alternate Governor

The United States is pleased to participate in the 49th Annual Meeting of the Asian Development Bank (ADB) and thanks the people of Germany for their warm hospitality. The past year has been marked by a series of important international commitments, starting with the Addis Ababa Action Agenda on Financing for Development, the 2030 Agenda for Sustainable Development, and the Paris Agreement on Climate Change. The ADB had its own historic moment as well, with the approval of the merger of its concessional and non-concessional lending resources, which goes into effect on January 1, 2017.

We now must turn to translating these ambitious commitments into actions and improved development outcomes for countries and their people. The goal is clear – catalyzing significant levels of new financing, including domestic resources, private flows, and official assistance, – to accelerate sustainable development; promote strong, balanced, and inclusive economic growth; and tackle some of the most pressing development challenges, including combating extreme poverty and climate change. The United States views the ADB as a principal partner in achieving this goal and we look forward to continuing our strong partnership with the ADB.

Economic Outlook

The ADB has been an important partner to governments and the private sector in the region. Its investments, particularly in infrastructure, have helped contribute to strong economic growth. The region remains a vital contributor to global growth, with Asian economic output increasing moderately from 5.4 percent in 2014 to 5.6 percent in 2015.

However, despite this growth, countries must make adjustments and undertake reforms to strengthen their economic fundamentals. The People’s Republic of China’s slowdown and broader weaknesses in global demand will require many Asian countries to recalibrate their growth models to bolster domestic demand and develop new engines of growth. At the same time, countries should avoid the temptation of trade protectionism and competitive devaluation that would further erode the benefits of increased trade linkages.

Many countries in the region are undertaking important structural reforms that boost productivity and encourage businesses to hire and grow, and many may also be on a path of fiscal consolidation. In those countries, structural reforms that strengthen the tax regime, improve efficiencies in the energy sector, and foster a more welcoming business climate are crucial to enhancing competitiveness. Some governments have taken advantage of the drop in oil prices to eliminate inefficient fossil fuel subsidies. This is commendable, yet further reforms are still needed to prepare for a rebound in oil prices. Eliminating inefficient subsidies frees up public resources to invest in other, more productive areas of the economy, such as infrastructure and education. The ADB is an important source of advice and financing as countries pursue these reforms.

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Groundbreaking Merger

The merger of the Asian Development Fund’s (ADF) concessional lending resources into the ADB’s Ordinary Capital Resources (OCR) was a highly innovative response to shareholders’ calls to make optimal use of the ADB’s existing financial resources. We are already seeing the benefits of this decision with the recent conclusion of negotiations for the Eleventh Replenishment of the ADF (ADF-12). The ADF-12 replenishment demonstrates how the merger will truly produce a triple win – potentially increasing both concessional and non-concessional assistance levels by more than 40 percent over time, while reducing donor contributions by more than 45 percent. The ADB’s strengthened financial position offers tremendous opportunities for developing member countries (DMCs). We look forward to the ADB and DMCs capitalizing on these opportunities to achieve lasting development results.

We also note that the groundbreaking merger has inspired other multilateral development banks (MDBs), allowing the ADB to play a positive role even beyond Asia and the Pacific. We congratulate President Nakao and all the ADB Management and staff for their wise stewardship of the merger process.

Delivering on the Merger through a Refreshed Corporate Strategy

The additional resources resulting from the merger can catalyze even more financing, enhancing the ADB’s development impact. For this to happen, the resources need to be deployed effectively. The ADB’s corporate strategy, which was formulated before the merger was contemplated, must now evolve in line with changes to the development landscape. The United States strongly supports Management’s proposal to begin drafting Strategy 2030 to define how the ADB will deploy its resources in support of the 2030 Agenda for Sustainable Development.

For Strategy 2030 to be successful, it should set out clear themes based on ADB’s comparative advantages and be underpinned by robust, results-focused policies that target Asia and the Pacific’s poorest. It should also reflect the emphasis on mobilizing domestic resources and reinvigorating private sector investment for sustainable development, which is at the heart of the Addis Ababa Action Agenda.

As the ADB updates its vision for engagement in Asia and the Pacific, it should not veer from its core function as an infrastructure-focused, project finance bank. The ADB has an excellent track record in project finance, and developing Asia depends on the ADB for its expertise and experience. This is especially true of the strong social, environmental, and procurement standards that the ADB promotes, which are themselves part of the ADB’s value addition promoting sustainable development in Asia and the Pacific. Maintaining this selectivity and commitment to high standards is particularly important given the region’s considerable infrastructure development needs. Within this core focus, we also hope to see continued emphasis on promoting equality for women and girls, mitigating and adapting to climate change, addressing the root causes and effects of fragility, and building regional connectivity.

ADB’s Role in a Diverse and Rapidly Evolving Region

Strategy 2030 should provide clarity on how the ADB will follow through on its commitment that the poorest countries will reap the greatest benefits from the merger and also help ADB better determine how to channel its resources both across and within DMCs. The ADF will remain a critical vehicle for helping to address the needs of many of the region’s poorest countries. As

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such, the ADF replenishment process will remain an important venue for shareholders and Management to discuss how the ADB can best support the poorest DMCs. Even with much of the ADB’s concessional assistance now to be provided from the OCR, robust support for the ADF is needed for the ADB to succeed in reducing extreme poverty and boosting sustainable, inclusive growth throughout the region.

Strategy 2030 must in particular clarify the ADB’s relationship with members that have reached middle-income status. The strong growth projections for the region suggest that most of the ADB’s borrowing member countries will do so by 2020, with many achieving upper middle-income status. This success should be celebrated, but with the recognition that even within these countries, lagging areas lack basic services and connectivity, and are home to significant numbers of the world’s poorest people. These countries also face global challenges, such as combatting climate change and environmental degradation.

With its sector expertise and high standards, there remains a targeted role for the ADB, in close collaboration with the governments and the private sector, to help eliminate poverty in these countries while promoting global public goods and sustainable growth. Strategy 2030 must identify the appropriate role for the ADB in countries approaching graduation. The ADB must clearly define – and abide by – its graduation criteria so that its resources are focused on supporting the needs of the poorest

Climate Finance

We applaud the ADB’s ambitious announcement to double its annual climate financing to $6 billion by 2020. This objective will be central to ADB’s new strategic direction. With this bold commitment, climate change will represent around 30 percent of the ADB’s overall financing by the end of this decade. Incorporating climate resilience and adaption measures in infrastructure projects will help ensure the sustainability of the ADB’s investments, and will contribute significantly to achieving the goals of the climate agreement concluded in Paris at the Conference of the Parties to the United Nations Framework Convention on Climate Change. In a region with countries disproportionately exposed to climate related risks – especially, for example, Pacific Island nations that will suffer from sea level rises and stronger and more frequent storms – this is appropriately a top priority for the ADB. This commitment also demonstrates how much more ADB can achieve with the additional resources created by the merger. We look forward to further elaboration in Strategy 2030 of how the ADB will allocate the $6 billion across the region and across adaptation and mitigation initiatives in support of the Paris Agreement.

Equipping the ADB to Deliver Well

To make the most efficient use of the additional financial capacity from the merger and to implement Strategy 2030 effectively, the ADB will also need the right human capital. We call on Management to ensure that the ADB has the requisite skill mix, management capabilities, and diversity. This will require continued emphasis on competitively recruiting and promoting staff based on merit so as to build a diverse and gender-balanced team of professionals. To ensure that a merit-based approach to recruitment takes hold across the institution and that the ADB has the management needed to adapt to the evolving development landscape, all shareholders must commit to modernizing the ADB by supporting open, transparent, and competitive recruitment at all levels.

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With the merger taking effect in 2017 and the successful conclusion of the ADF-12 replenishment negotiations this week, the ADB has the financial capacity that it needs to support Asia and the Pacific in implementing the ambitious 2030 Agenda for Sustainable Development. Even with this significant expansion in financial capacity, it is still prudent for shareholders to monitor regularly the ADB’s financial sustainability and to look to do even more with existing resources. We therefore call on Management to seek further opportunities for balance sheet optimization.

The United States recognizes the ADB’s vast accomplishments as well as the opportunity for the ADB to have an even greater impact as a result of the merger. The ADB still has hard work ahead, however. As the ADB enters a new chapter in supporting sustainable development, it must strive to maintain its focus on helping the poorest while continuing to modernize management and bolster its efficiency and effectiveness. The United States will stand by the ADB to ensure that it succeeds in its critical mission.

UZBEKISTAN Rustam Azimov, Governor

Dear Chairman, Fellow Governors, Dear President Nakao, Distinguished guests, ladies and gentlemen,

During the 50 years that have passed since the beginning of its activities, ADB has taken an important place in the international financial system as a unique multilateral financial institution that supports national programs of sustainable development, structural reforms, the fight against poverty and development of regional cooperation on the Asian continent.

World economy

No doubt, that over these 50 years, the current situation in the global economy is the most controversial and unpredictable. Serious problems remain at the background of the ongoing global crisis, a sharp decline in demand, the uncertainty in world markets, a fall in output and all related consequences, affecting the majority of countries in the world.

All this deepens by the instability of the international financial system, which is marked by the following factors:

First - banking supervision at national and global levels regularly produces system crashes, forcing state budgets – in fact taxpayers, to pay for sometimes adventurous banking practices.

Second – expansion of public funds channeled in banks, nevertheless, failed to stimulate growth of bank lending. Looking for additional income, banks reduce lending, moving away from their main function - to finance the real economy. Many international banks increasingly involve in speculative operations with "virtual" assets.

As a result, we see an inverted pyramid, where the banking sector considers servicing the real economy as a secondary task. Under these conditions, the banking supervision becomes like a fireman, moving away from its original mandate.

As an outcome, over the recent years, the international financial system has time after time faced the mortgage crisis, the sovereign debt crisis and negative interest rates, while the volume of derivatives has grown drastically, tens times greater than the volume of world GDP.

We have to talk about it again and again, as dynamically developing economies, expanding their participation in the global economy, especially strongly affected by current situation.

Unfortunately, a full analysis of the underlying causes of the crisis ongoing since 2008 has not yet been carried out. And without understanding its root causes, and in absence of effective responses to counter the crisis, the world economy remains in crisis for almost 10 years, and nobody knows when it is over.

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Economic development of Uzbekistan

Dear Governors,

Let me now brief you on how Uzbekistan withstands external shocks and disorder experienced by the world economy. In the difficult situation faced by all countries, the President of Uzbekistan Islam Karimov at the outset developed a strategy to counter the crisis by implementing major structural reforms.

The main features of this strategy, which has become a logical continuation of the "Uzbek development model" are as follows:

First – maintaining macroeconomic stability and ensuring sustainable economic growth. For more than 10 years, Uzbekistan has a triple surplus –of the state budget, external trade and balance of payments. The level of external debt does not exceed 18.5% of GDP, and in 2011 we were able to repay completely the domestic debt.

Second - active implementation of structural reforms. This is not just exploration and export of the rich natural resources of Uzbekistan, like hydrocarbons, precious, non-ferrous and rare metals, agricultural commodities, but their deep processing and production of export-oriented products, which are at least 3-4 times more expensive than the feedstock.

In the process of developing modern industrial enterprises based on latest technologies, we actively cooperate with worldwide international companies – global technology leaders from Germany, USA, Japan, Republic of Korea, Switzerland, and other developed countries.

Just couple of figures, over the past 10 years, the volume of Uzbekistan's export grew by around 3 times, contributing to increase of the official reserves of the Central Bank to the level that exceeds 24 months of imports.

Third - is a radical increase of the private property role, active promotion of private and foreign investments, reduction of the government’s role and share in the economy, introduction of modern corporate governance standards.

Fourth – large-scale modernization and development of transport, communications, industrial and social infrastructure.

A key factor for dynamic and sustainable development of our economy, enhancing its global competitiveness in the long term - is, we believe, a deep reforms of primary, secondary, vocational and higher education.

The annual budget expenditure for education in Uzbekistan exceeds 12 percent of GDP, and over a short period, we have developed a new, modern secondary and vocational education systems based on international standards.

Branches of the leading international universities of United Kingdom, Italy, Singapore, Republic of Korea and Russia along with Uzbek universities teach our young modern engineers, managers and scientists.

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As a result of all these reforms, over the past 10 years Uzbekistan's economy is growing by more than 8% per year. Most important – population income grow annually by 15 per cent in average and today GDP per capita has reached 6 thousand US dollars.

ADB and Uzbekistan

Dear Governors,

We are grateful that for more than 20 years ADB is a strategic partner of Uzbekistan in implementation of structural reforms.

As a result, today our portfolio of cooperation consists of 55 projects with a total value of more than USD 13 billion, supported by the Bank loans for more than USD 5 billion.

I would like to emphasize that each of our joint projects bases on the shared strategy, clear concepts, realistic economic returns and a common understanding of long-term goals. Using this opportunity, I would like to thank management and staff of the bank for their highest professionalism and dedication.

In this connection, I would like to emphasize that President Nakao actively continued the strategy of expanding the Bank’s operations and improving its financial sustainability, increasing its role in development and poverty reduction on the Asian continent, initiated by President Tadao Chino and then successfully continued by President Kuroda.

The most important achievement of the President Nakao is the doubling of the Bank's capital and a major review of its operations, which became more effective and targeted. All this provided an unprecedented amount of growth in the Bank's operations from USD 22 to USD 27 billion.

We see that the President Nakao - a man who professionally understands the nature of challenges and pressures of the modern time - confidently organizes ADB activities to confront these challenges in implementing the Bank's main function - to ensure poverty reduction.

In this regard, I would like on behalf of the Government of Uzbekistan, to express support for the nomination of Mr. Nakao to a new five-year term in the office of the President of ADB.

However, the challenges and problems faced by the global economy and international financial system, and their impact on Asian countries call for further improvements in the efficiency of the Bank's activities.

In this regard, I would like to propose additional measures to improve the operational efficiency of ADB:

First, the Bank management should be given more powers to redirect unutilized free resources to counties, successfully implementing structural reforms and projects based on sound banking principles. Country quotas and limits, in our opinion, should be retained, but play an indicative role rather than the limiting one.

Second - improvement of corporate governance, including strict adherence to the ADB Articles of Agreement, to the principles of a clear division of powers between the Board of Executive

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Directors and the Bank's management. This is important also from the point of view of efficiency of both sides.

Third –bringing the Bank’s activities closer to its countries of operations, including through the expansion, strengthening and increasing the role of ADB's regional offices. This is essential to ensure better project implementation and results.

We are sure that today ADB fully equipped to fulfill its mandate and we wish President Nakao and his team successful implementation of its strategy in this difficult period.

In conclusion, let me, on behalf of the delegation of the Republic of Uzbekistan, thank the Government of the Federal Republic of Germany, the authorities and citizens of the beautiful city of Frankfurt for the warm hospitality and excellent organization of the 49th Annual Meeting of the Board of Governors of the Asian Development Bank.

Thank you.

VIET NAM Nguyen Thi Hong, Alternate Governor


It is my great honor today to represent the Viet Nam delegation to deliver the speech at the 49th Annual Meeting of the Board of Governors of the Asian Development Bank (ADB). First of all, I would like to express my sincere appreciation to ADB and Organization Committee for the excellent arrangements for the Annual Meeting as well as other sideline events. I hope that this annual meeting will connect finance and development professionals to exchange ideas and achieve tangible results for sustainable development in the Asia-Pacific region in line with the annual meeting’s theme “Cooperating for Sustainability”.

Global growth remained weak in 2015 and early 2016 on account of a further slowdown in emerging markets and oil-exporting economies. The world markets witnessed a sharp decline in demand for essential goods, especially crude oil. The prospects for developing economies remain challenging due to a weak outlook for commodity exporters, tightening capital flows, and still subdued investment and trade growth. Growth in advanced economies experienced weaker recovery especially in the US, and with firmer growth especially in the Euro area and Japan, supported by lower oil price, loose monetary policy, and improvement in fiscal conditions of the Euro area and investors’ confidence.

Growth is projected to edge up in 2016 but the forecast is subject to substantial downside risks, including a disorderly slowdown in major emerging market economies, financial market turmoil arising from sudden shifts in borrowing costs amid deteriorating fundamentals, lingering vulnerabilities in some countries, and heightened geopolitical tensions, etc... In order to attain strong, sustainable and balanced growth, countries need to introduce adequate mix of macroeconomic policies, accelerate structural reforms and in the meantime promote mutual cooperation.


We highly appreciate the critical role of ADB in promoting economic development and poverty reduction in Asia and the Pacific region during the challenge period of global economy. We are grateful for the financial support, technical assistance and policy advice that ADB has extended to us over the years. Viet Nam pledges to utilize this valuable resource effectively to promote poverty reduction and support socio-economic development.

We strongly support ADB to implement the Corporate Strategy to 2020 with the vision of an Asia and Pacific free of poverty and mission to help its member countries improve their living conditions and quality of life. We welcome and appreciate ADB’s efforts in implementing the priorities of: (i) poverty reduction and inclusive economic growth; (ii) environment and climate change; (iii) regional cooperation and integration; (iv) infrastructure development; (v) private sector development; and (vi) strengthening ADB’s capacity and effectiveness. In particular, ADB should enhance its lending capacity, including through combining Asian Development Fund’s lending operations with the Ordinary Capital Resources balance sheet. We believe that ADB’s recent activities are consistent with the Viet Nam Sustainable Development Strategy to 2020.

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We also appreciate ADB’s effort to develop a new corporate strategy which will enable it to more effectively respond to the higher ambition of the 2030 Development Agenda focusing on 3 strategic pillar: (i) More innovative and productive economy; (ii) Enhanced and more inclusive service delivery; and (iii) Improved environmental sustainability and climate change adaptation.


Under the remarkable effort of the Government in implementing comprehensive economic reforms, Viet Nam’s economy has achieved many positive outcomes in 2015. GDP growth reached 6.68% in 2015 which was the highest level for the past 5 years. Inflation continued to be well contained at the lowest level over the past 10 years. Restructuring of the banking system and NPLs resolution have been conducted in accordance with the set roadmap which created positive effects, contributing to the stability of the financial system and macroeconomic conditions.

In an effort to deepen international economic integration, Viet Nam has entered into a number of free trade agreements with major trade partners. This process is expected to accelerate structural transformation of Viet Nam economy, stipulate investment, and reinforce the further diversification of Viet Nam’s export basket toward manufacturing products, reflecting Viet Nam’s participation in global value chains.

In the context of a broader global integration and more diversified and unforeseeable challenges faced by countries all over the world, we hope that ADB would continue its effort in providing valuable supports to member countries to eliminate poverty and obtain balanced and sustainable growth. Viet Nam values ADB’s recommendations and policy consultation which stress on restructuring the economy, improving qualified human resources and developing infrastructure to achieve sustainable growth. We reaffirm our commitment to work together with ADB and other countries in achieving our own targets contributing to “an Asia and Pacific free of poverty and Cooperating for Sustainability”.


ADB always accompanies Viet Nam as a credible partner throughout the country development phases in the last 20 years. I would like to express my deep and sincere appreciation to ADB and other donors. I strongly believe that this cooperation will continue to be enhanced both in depth and width.

On this occasion, I would like to sincerely thank the Government and the people of Germany for the warm welcome and excellent arrangements for this Annual Meeting as well as the opportunity extended to delegates to visit your beautiful dynamic and enthusiastic Frankfurt city.

I wish the Meeting fruitful outcomes.

I wish delegates success, good health and happiness.

Thank you!

Closing Address by ADB President Takehiko Nakao at the 49th Annual Meeting of the Board of Governors in Frankfurt, Germany on 5 May 2016

(As drafted)

Mr. Chairman, Honorable Hans-Joachim Fuchtel, ADB Governors, ladies and gentlemen,

As we are coming to the end of this annual meeting, I would like to thank all of you for your active participation over the last few days. On behalf of ADB, I express our deepest gratitude to the Government of Germany and this beautiful City of Frankfurt for their warm hospitality and efficient organization.

We have exchanged constructive and frank views on many important topics. The meeting focused on quality jobs, private sector development, and climate actions.

At this moment, I would like to highlight some key issues that you raised during this meeting.

1. Asian Economy and Reform Efforts. Many of you mentioned that the economic outlook inAsia and the Pacific, in general, remains strong. Many countries are experiencing robust growth. However, uncertainties and challenges remain. It is encouraging to learn that many countries are undertaking important reforms. These efforts should continue. To realize their full growth potential, we should also maintain sound macroeconomic policies; invest more in infrastructure, human capital, and technology; develop efficient financial markets; and improve the investment climate.

2. Stronger Financing Capacity and Scaling up Operations. You recognized the significanceof the merger of our Asian Development Fund (ADF) lending operations with the Ordinary Capital Resources (OCR) balance sheet, effective 1 January 2017. This will increase our annual loan and grant approvals by over 50%, to more than $20 billion by 2020. In fact, we have made good progress in scaling up our operations. ADB loan and grant approvals were a record $16.3 billion in 2015, an increase of 21% over 2014 levels.

We also completed a strong replenishment of ADF 12 for the period 2017–20 earlier this week here in Frankfurt. I take this opportunity to thank the 32 donors for their generous contributions, despite difficult fiscal situations in some of your countries. I particularly appreciate the contributions from emerging Asian economies. The share of their contributions increased to 11.7%, compared with 6.9% during the ADF 11 period. The new ADF comes with a number of innovative features, including a doubling of the minimum allocation for small countries, strengthened support for disaster risk management, and regional health security.

As you stressed, our challenge now is how to use the increased financing capacity well. We will ensure that poor countries benefit most. We agree with you on the importance of result-based approach and regular assessments of outcomes based on solid data including through independent reviews and involvement of civil society organizations (CSOs).

ADB will remain efficient and effective. We will make best use of our staff and budget.

Some also suggested that we should consider seeking a capital increase in the medium term to respond to the huge and growing financing needs and to reflect changing economic circumstances in the region.

3. Poverty Reduction. You have asked us to maintain a strong focus on reducing poverty andaddressing growing inequality. I assure you of our deep commitment to the Sustainable Development Goals. We will give priority to fragile and conflict affected countries. We will continue to help create quality jobs, paying attention to good working conditions and core labor standards. We will further deepen our work on gender equality in our operations. We are increasing our support for health and education sectors. We will continue our work on social protection, including effective conditional cash transfers.

The successful ADF replenishment will increase our capacity to provide grants to the region’s poorest countries by 70%. We will also increase substantially concessional lending from OCR.

4. Climate Change Actions. Our region, especially the Pacific island countries, is highlyvulnerable to climate change. At the same time, as economies are growing, the region has a vital role to play in global mitigation efforts. Many governors emphasized the role of ADB in supporting the COP21 agreement. ADB is strongly committed to helping its developing member countries (DMCs) meet their Intended Nationally Determined Contributions (INDCs) through loans and grants, policy dialogue, and capacity building. Rapid urbanization in Asia provides important opportunities for climate actions.

We have committed to double our climate financing to $6 billion by 2020 from the current level of $3 billion. Of the $6 billion, $4 billion will support mitigation and $2 billion will be for adaptation. We are putting in place a new strategic framework to guide our support for INDCs. We will help our DMCs access various climate funds, including the Green Climate Fund.

5. Responses to Economic and Disaster Shocks. I acknowledge the need for ADB to provideprompt support to countries affected by cyclical economic downturns, contingent on their sound macroeconomic policies, reform efforts, and active discussion between the IMF and the country. Also, we will continue to respond quickly to calls for support in the wake of natural disasters. Mainstreaming ADF’s disaster response facility will enhance our capacity to respond in poorest countries. We will also support disaster risk reduction efforts, including through the disaster risk reduction facility newly created under ADF 12. We will explore innovative approaches such as the disaster insurance mechanism, and a special contingent facility which can be drawn down in response to disasters.

6. Private Sector Development. The private sector is the key to growth and stability. Ourprivate sector operations have increased rapidly in recent years and will constitute 25% of our total market-based OCR operations by 2020. In 2015, we introduced a faster and streamlined business approach to support small projects that are mostly in our least developed and small economies.

Effectively catalyzing greater private sector resources for infrastructure and other development needs is critical. We are strengthening our work for public–private partnerships. We will also improve the investment climate through policy-based lending and technical assistance.

7. Infrastructure Finance and High-Level Technology. Infrastructure financing will continueto be ADB’s major focus. In doing so, we will collaborate closely with other financing partners, including the Asian Infrastructure Investment Bank with which we signed an MOU for deeper cooperation in Frankfurt. Needless to say, safeguards for social and environmental impacts will be indispensable components of our operations.

Our operations should have demonstrational impacts through good projects that can be replicated by DMCs. To promote the use of cleaner and more advanced technologies in our projects, we are adjusting project designs and procurement procedures. We should pay increased attention to maintenance cost and lifecycle. Our technical experts will play a greater role in the early stages of the project cycle to ensure that the most appropriate high-level technologies are used.

8. Project Implementation. I fully share your concerns about the need to improve our projectimplementation and disbursements, and to deliver outcomes faster. Unless loans and grants are disbursed, they have no impact on development. We are working hard to improve project readiness. We have streamlined our procurement review process to speed up project implementation. For small island countries in the Pacific, we now have a simplified system of project implementation adapted to local conditions.

We will make greater use of country systems, and improve the quality of consultants and contractors. We will continue to strengthen our resident missions by providing them greater authority, and out-posting more staff. We will help build the capacity of implementing agencies.

9. Knowledge Work. Our clients do not just want financing. They also need our knowledge andcross-country experiences. We have established 7 sector and 8 thematic groups to provide leadership in our knowledge work, support operational departments, and build partnerships with centers of excellence and other development partners.

10. Human Resources. Skilled and motivated staff are essential to provide good services toclient countries through projects and knowledge work. We are committed to merit-based and transparent recruitment and promotion with due attention to geographical balance. Gender balance should be improved. We are making every effort to hire, retain, and promote more women. We are promoting a respectful workplace.

We want to make the best use of our existing talent. To that end, we plan to increase the mobility of staff across departments and between headquarters and resident missions to broaden staff perspectives and enhance their potential. To keep skills up-to-date, we are investing more in staff development.

11. Strategy 2030. Many of you expressed your strong support for the preparation of Strategy2030, and stressed the importance of close consultations with all stakeholders including CSOs. The new strategy will help us define our approach to the Sustainable Development Goals and COP21. It will also elaborate on our approaches to upper middle-income countries and regional cooperation and integration.

12. Fifty Years of ADB. This year marks ADB’s 50-year anniversary. It provides an opportunityto reflect on what has been accomplished and how ADB can become stronger, better, and faster. We are preparing a publication on ADB’s 50 years of partnership with our members, and about Asia’s remarkable development experiences over this period. We have begun an ADB@50 campaign to reach out to people in our member countries, including our host country the Philippines.


Once again, I want to extend my personal gratitude to the Government of Germany, and Governor Fuchtel, for the warm hospitality and excellent arrangements. I also thank officials and volunteers who helped make this meeting a great success.

Finally, please join me in welcoming Japan’s hosting of ADB’s 50th Annual Meeting in Yokohama next year.

I thank you all again and have a safe journey home.

GOVERNORS AND THEIR DELEGATIONS

Country Represented Last Name First Name Registration Category

Afghanistan Hakimi Eklil Ahmad Governor

Shairzay Ahmad Wali Adviser

Aria Mustafa Adviser

Habibi Sayed M. Ameem Adviser

Khan Abdul Qahhar Adviser

Shams Mohammad Yamma Adviser

Armenia Gabrielyan Vache Governor

Safaryan Pavel Alternate Governor

Avetisyan Rafayel Temporary Alternate Governor

Australia Fierravanti-Wells Concetta Temporary Alternate Governor

Croke Leesa Temporary Alternate Governor

Larkin John Adviser

Christie Rob Adviser

Kirk Gillie Adviser

Guthrie Jeremy Adviser

Atkin Georgina Adviser

Kim Mary Adviser

Annamalay Amanda Adviser

Brown Isobel Adviser

Ritchie David Adviser

Austria Schoenleitner Guenther Alternate Governor

Hagg Verena Temporary Alternate Governor

Baumgartner Veronika Temporary Alternate Governor

Azerbaijan Sharifov Samir Governor

Mursagulov Azer Temporary Alternate Governor

Seyidzade Ulvi Temporary Alternate Governor

Heydarov Yusif Adviser

Bangladesh Muhith Abul Maal Governor

Mejbahuddin Mohammad Alternate Governor

Sorcar Muhammad Ali Temporary Alternate Governor

Ahmed Saifuddin Temporary Alternate Governor

3


Yasmin Fatima Adviser

Huq S M Jakaria Adviser

Choudhury Syed Masum Ahmed Adviser

Muhith Samina Adviser

Saleheen Ahmed Adviser

Belgium Knoll Stefany Temporary Alternate Governor

Bhutan Dorji Namgay Governor

Wangchuk Choiten Alternate Governor

Tashi Tshering Adviser

Wangmo Phuntsho Adviser

Brunei Darussalam Ibrahim Pehin Dato Abd Rahman Governor

Mohamad Nazmi Alternate Governor

Ahmad Asrul Temporary Alternate Governor

Badar Rokiah Temporary Alternate Governor

Abd Rahman Yusof Adviser

Leong Kelly Chan Chee Adviser

Mohd Sahrip Mohammad Haziq Adviser

Mohsin Mahani Adviser

Rashid Irwan Adviser

Cambodia Vongsey Vissoth Alternate Governor

Hem Vanndy Temporary Alternate Governor

Phan Phalla Temporary Alternate Governor

Chhuon Samrith Adviser

Yi Sokthearith Adviser

Wattanak Non Adviser

Mey Vann Adviser

Chan Sopheap Adviser

Eng Touch Adviser

Chheang Vanarith Adviser

Chan Sopanhavorn Adviser

Canada Peña Patricia Temporary Alternate Governor

Saravanamuttoo Neil Temporary Alternate Governor

Atar Laura Adviser

4


China, People's Republic of Lou Jiwei Governor

Shi Yaobin Alternate Governor

Liu Jian Temporary Alternate Governor

Cheng Zhijun Temporary Alternate Governor

Wang Zhongjing Temporary Alternate Governor

Chang Junhong Adviser

Zhou Qiangwu Adviser

Zhang Bo Adviser

Xie Sheng Adviser

Yao Licheng Adviser

Gong Feng Adviser

Li Rui Adviser

Qin Jie Adviser

Wu Wei Adviser

Qin Yuexing Adviser

Hu Zhenhu Adviser

He Yan Adviser

Song Rui Adviser

Ruan Zhong Adviser

Wang Yan Adviser

Mu Xiaotian Adviser

Cai Linghui Adviser

Zhou Shengyan Adviser

Yuan Zhenyu Adviser

Hua Xin Adviser

Luo Jing Adviser

Liang Yan Adviser

Yu Xiao Adviser

Cao Li Adviser

Wang Hongbo Adviser

Liu Jing Adviser

Cook Islands Brown Mark Governor

Henderson Garth Alternate Governor

Denmark Jespersen Morten Governor

Thomsen Jesper Segelcke Temporary Alternate Governor

Larsen Theo Temporary Alternate Governor

5


Fiji Islands Sayed-Khaiyum Aiyaz Governor

Whiteside Barry Alternate Governor

Baravilala Tupou'tuah Temporary Alternate Governor

Narain Valerie Temporary Alternate Governor

Rauqeuqe Lanieta Temporary Alternate Governor

Singh Pankaj Temporary Alternate Governor

Finland Kalkku Elina Governor

Torvinen Laura Temporary Alternate Governor

Hirvonen Pekka Temporary Alternate Governor

France Baudry Philippe Temporary Alternate Governor

Amar Martin Temporary Alternate Governor

Vincensini Julien Temporary Alternate Governor

Georgia Khaduri Nodar Governor

Lezhava David Temporary Alternate Governor

Chanishvili Khatia Temporary Alternate Governor

Germany Fuchtel Hans-Joachim Governor

Kothé Marianne Alternate Governor

Failer Peter Temporary Alternate Governor

Zattler Jürgen Temporary Alternate Governor

Drescher Rolf Temporary Alternate Governor

Groehl Cornelia Adviser

Schenk-Dornbusch Sigrid Adviser

Schmiedchen Frank Adviser

Theus Florian Adviser

Hochstatter Christine Adviser

Vest Brunhilde Adviser

Hofmann Ina Adviser

Gerhardt-Koeppen Sabine Adviser

Renneke Erika Adviser

Hungermann Kirsten Adviser

Stoldt Marion Adviser

Hong Kong, China Yue Eddie Temporary Alternate Governor

Lok Georgina Temporary Alternate Governor

6


India Jaitley Arun Governor

Das Shaktikanta Alternate Governor

Kumar Raj Adviser

Singh Gurjit Adviser

Dash Simanchala Adviser

Kumar Raveesh Adviser

Indonesia Brodjonegoro Bambang P.S Governor

Djalil Sofyan Alternate Governor

Nazara Suahasil Temporary Alternate Governor

Ampri Irfa Temporary Alternate Governor

Sukorini Ayu Temporary Alternate Governor

Subandi Subandi Temporary Alternate Governor

Putranto Dewo Broto Joko Temporary Alternate Governor

Lestari Dian Temporary Alternate Governor

Bowo Fauzi Temporary Alternate Governor

Rassat Zandy Akbar Adviser

Rahman Rizky Aulia Adviser

Wahyu Hernawan Boby Adviser

Ardiyanto Ferry Adviser

Wicaksono Vincentius Krisna Adviser

Putro Adijayanto Eko Adviser

Hadiyanto Hadiyanto Adviser

Ahmad Badaruddin Kiagus Adviser

Pambudi Heru Adviser

Zainuddin Sihotang Marisi Adviser

Irawan Irawan Adviser

Setiawan Gandy Adviser

Martowardojo Agus D.W. Adviser

Warjiyo Perry Adviser

Munandar Haris Adviser

Dwisaputra Rachmat Adviser

Widjajanti Niken Tjandra Adviser

Waluyanto Rahmat Adviser

Purnomo Slamet Edy Adviser

Akyuwen Roberto Adviser

Bachtiar Novita Adviser

Hersetiati Wahyu Adviser

Amdjad Mudzakir Adviser

7


Septadijaya Doni Adviser

Alimin Joneri Adviser

Wineka Pamitra Adviser

Basuki Setiawan Adviser

Darwis Firman Adviser

Martediansyah Martediansyah Adviser

Ireland Ryan Paul Alternate Governor

Fitzgerald Daniel Temporary Alternate Governor

Italy Visco Ignazio Governor

Giansante Filippo Alternate Governor

Parigi Giuseppe Temporary Alternate Governor

Bazzoni Stefania Temporary Alternate Governor

Cogliati Alberto Temporary Alternate Governor

Japan Aso Taro Governor

Kuroda Haruhiko Alternate Governor

Asakawa Masatsugu Temporary Alternate Governor

Okamura Kenji Temporary Alternate Governor

Doi Toshinori Temporary Alternate Governor

Hasegawa Koichi Temporary Alternate Governor

Tanabe Masashi Temporary Alternate Governor

Maeda Tsutomu Adviser

Yokoo Kosuke Adviser

Hosoda Shuichi Adviser

Takimura Haruto Adviser

Okamoto Masateru Adviser

Shimizu Kazuya Adviser

Fukuta Makoto Adviser

Haga Ikko Adviser

Nitta Kohei Adviser

Hiki Shigeto Adviser

Yamada Fumihiko Adviser

Watanabe Masaaki Adviser

Terada Shinichiro Adviser

Kurasawa Shinichiro Adviser

Kuramoto Atsuhiro Adviser

Taguchi Yohei Adviser

Shinoda Masahiro Adviser

8


Tsuchiya Akihiro Adviser

Makino Masaharu Adviser

Takami Manabu Adviser

Nishio Takahiro Adviser

Ito Taku Adviser

Iwabuchi Junichi Adviser

Yamada Keishi Adviser

Shimizu Tokiko Adviser

Yamada Takahito Adviser

Kanaguchi Takehisa Adviser

Mifune Jun Adviser

Izuta Kohei Adviser

Inoue Masami Adviser

Yagi Takeshi Adviser

Kobayashi Kazuhisa Adviser

Kobayashi Goya Adviser

Kamiyama Takeshi Adviser

Tsunoda Yoshitaka Adviser

Takahashi Kazuya Adviser

Kashiyama Junichi Adviser

Kojima Naoki Adviser

Sakurada Yasuko Adviser

Fukuda Ayaka Adviser

Miyawaki Maiko Adviser

Ano Mariko Adviser

Uezu Yu Adviser

Mizuno Toshihiro Adviser

Furui Miyuki Adviser

Takeda Shiro Adviser

Ikeda Kaoru Adviser

Akiyama Tatae Adviser

Yamada Keishi Adviser

Yamada Takahito Adviser

Yokoo Kosuke Adviser

Kazakhstan Marat Kussainov Temporary Alternate Governor

Kelimbetov Kairat Temporary Alternate Governor

Nurym Ayazbayev Temporary Alternate Governor

Dutbayev Nurlan Temporary Alternate Governor

Dossymbekov Bauyrzhan Temporary Alternate Governor

9


Nussupov Bolat Adviser

Korea, Republic of Yoo Ilho Governor

Lee Juyeol Alternate Governor

Song In-Chang Temporary Alternate Governor

Chung Kyuil Temporary Alternate Governor

Kang Dong Soo Adviser

Park Joonkyu Adviser

Chang Do-Hwan Adviser

Lee Yong Joo Adviser

Park JoonBaek Adviser

Min Kyungshin Adviser

Kim Hyunggoo Adviser

Kang Yusin Adviser

Lee Woong Cheon Adviser

Seo Jeong Min Adviser

Jeong Jinwoo Adviser

Jung Woojae Adviser

Kim Yong-hyuck Adviser

Lee Jun Young Adviser

Park So-Young Adviser

Shunwoo A Jung Adviser

Chun Chi Un Adviser

Cho Hyun Adviser

Kim Min Woo Adviser

Ko Na-Yeon Adviser

Suh Bong Gook Adviser

Park Young Chool Adviser

Ahn Jihoon Adviser

Chun Jae Ho Adviser

Kim Ha Rin Adviser

Lee Kangho Adviser

Han Moon Hyun Adviser

Choi Jinkwang Adviser

Kang Yusin Adviser

Kim Hyunkee Adviser

Kim Sung Jin Adviser

Kyrgyz Republic Murzaev Kubat Temporary Alternate Governor

Tursunkulov Kairat Adviser

10


Lao People's Democratic Republic

Douangdy Somdy Governor

Dalaloy Vathana Alternate Governor

Chanthavongsa Thipphakone Temporary Alternate Governor

Phaysith Somphao Adviser

Phonhxiengdy Oth Adviser

Keovongvichith Phetsathaphone Adviser

Volarath Holady Adviser

Kittavong Phouvong Adviser

Phoummasack Rithikone Adviser

Khounsy Boualith Adviser

Savaddy Vanida Adviser

Keovongvichith Phanomphone Adviser

Vilayvieng Daomanivone Adviser

Chittaphong Chittakone Adviser

Leuangvansay Viengvanly Adviser

Sanoubane Vatthana Adviser

Sengphaathith Chanpasith Adviser

Khamphanith Vadsana Adviser

Phandanouvong Phatsaphone Adviser

Singhavara Vanida Adviser

Somphong Virasac Adviser

Luxembourg Jacoby Arsène Alternate Governor

Tonnar Manuel Temporary Alternate Governor

Masri Sami Temporary Alternate Governor

Malaysia Abdul Ghani Johari Governor ad interim

Md Desa Siti Zauyah Temporary Alternate Governor

Singh Sukudhew Temporary Alternate Governor

Kamarudin Adina Temporary Alternate Governor

K P Vengadala Jaya Kumaran Temporary Alternate Governor

Mohsin Mohd Ridha Adviser

Mohd Sibi Norhaslinda Adviser

Mohamad Ali Faeez Adviser

Lee Doulos Adviser

Adun Abdul Rahman Adviser

Mohd Mokhtar Mohd Fahmi Adviser

Abdul Aziz Azryta Adviser

11


Maldives Nashia Aminath Temporary Alternate Governor

Abdul Ghafoor Abdul Haleem Temporary Alternate Governor

Mongolia Bayarbaatar Bolor Governor

Badamkhatan Gantulga Temporary Alternate Governor

Darinchuluun Erdenetuya Adviser

Pfeil Dirk Adviser

Pitum Andreas Adviser

Tsolmon Bolor Adviser

Myanmar Win Kyaw Governor

Win Maung Maung Temporary Alternate Governor

Oo Sandar Temporary Alternate Governor

Maung Kyaw Kyaw Temporary Alternate Governor

Myint Yin Yin Temporary Alternate Governor

Maung Gyi May Malar Adviser

Oo Khin Saw Adviser

Moe Moe Tin Adviser

Ko Aye Ko Adviser

Nauru Adeang David Governor

Hunt Martin Alternate Governor

Adeang Damon Iyonab Adviser

Petersen John Ray Adviser

Nepal Bhandari Damodar Governor ad interim

Pokharel Surya Prasad Temporary Alternate Governor

Netherlands Hilberink Eric Temporary Alternate Governor

Zondag Marc Temporary Alternate Governor

Willems Sophie Rose Adviser

Suripatty Sipora Adviser

New Zealand English Bill Governor

Makhlouf Gabriel Alternate Governor

Houkamau Amohaere Temporary Alternate Governor

Vandersyp Constantijn (Stan) Temporary Alternate Governor

Thomson Amy Temporary Alternate Governor

Harris Rodney Adviser

Russell Kate Adviser

12


Norway Skogen Tone Governor

Haaland Hege Temporary Alternate Governor

Dana Ingrid Hordvei Temporary Alternate Governor

Eikeland Elin Adviser

Holm Terese Adviser

Pakistan Dar Mohammad Ishaq Governor

Bajwa Tariq Alternate Governor

Saeed Muhammad Sami Temporary Alternate Governor

Saleem Jauhar Temporary Alternate Governor

Tariq Rizwan Adviser

Ahmed Nadeem Adviser

Alam Muhammad Adviser

Cheema Waseem Ahmed Adviser

Fizza Naqvi Wioletta Teresa Adviser

Hussain Syed Mujtaba Adviser

Javed Muhammad Adviser

Wienke Boulris Marion Adviser

Palau Sadang Elbuchel Governor

Papua New Guinea Pruaitch Patrick Governor

Gomez Clarence Brian Adviser

Yer Gabriel Adviser

Pamea Loma Adviser

Schnaubelt Walter Adviser

Schutfort Erwin Adviser

Philippines Purisima Cesar Governor

Tetangco, Jr. Amando Alternate Governor

Tan Roberto Temporary Alternate Governor

Guinigundo Diwa Temporary Alternate Governor

Tan Maria Edita Adviser

Antonio Alfredo Adviser

Villa Edna Adviser

Dueñas Maria Teresa Adviser

Butocan Sittie Hannisha Adviser

Tano Jose Recon Adviser

13


Portugal Matias Alvaro Temporary Alternate Governor

Galan Enrique Temporary Alternate Governor

Samoa Tuioti Sili Epa Governor

Lavea Iulai Alternate Governor

Enari Atalina Emma Temporary Alternate Governor

Pereira Benjamin Temporary Alternate Governor

Siliva Lae Temporary Alternate Governor

Tafunai Margaret Roberta Temporary Alternate Governor

Singapore Heng Swee Keat Governor

Sohan Jai Temporary Alternate Governor

Yee Ping Yi Temporary Alternate Governor

Lim Alvin CT Temporary Alternate Governor

Chua Lina Temporary Alternate Governor

Soh Yong Seng Temporary Alternate Governor

Menon Ravi Adviser

Loh Jacqueline Adviser

Lee Ser-Jin Adviser

Wang Yining Adviser

Gwee Wei Peng Kelvin Adviser

Rahmat Khairul Azman Adviser

Chuang Trina Adviser

Lau Gregory Adviser

Lau Han Yang Adviser

Solomon Islands Harry Kuma Alternate Governor

Denton Rarawa Temporary Alternate Governor

Dentana McKinnie Adviser

Spain Javier Sanz Temporary Alternate Governor Fernandez Mendez de Andes Javier Temporary Alternate Governor

Fernandez-Cuervo Juan Temporary Alternate Governor

Sri Lanka Karunanayake Sandresh Ravindra Governor

Rafeek Mohamed Ismail Mohamed Alternate Governor

Samaratunga Ranepura Hewage Samantha Temporary Alternate Governor

14


Rathnayake RathnayakeMudiyanselage Priyantha

Adviser

Udugahapattuwa Udeni Adviser

Feroze Dilshad De Alwis Adviser

Amunugama Karunatilaka Adviser

Gunaratna Mudiyanselage Ranjith Adviser

Sweden Frotzler Jörgen Temporary Alternate Governor

von Hedenberg Kerstin Temporary Alternate Governor

Switzerland Furrer Raymund Governor

Lüthi Denise Alternate Governor

Grunder Jonas Adviser

Geiger Steven Adviser

Taipei,China Chang Sheng-Ford Governor

Chen Hwa-Yue Temporary Alternate Governor

Juan Ching-Hwa Adviser

Wang Randy Adviser

Lee Jih-Chu Adviser

Tseng Yu-Peng Adviser

Den Yen-Dar Adviser

Chen Po-Cheng Adviser

Shyy Lih-Jiun Adviser

Tsai Chinghua Adviser

Chi Yuan-Han Adviser

Tseng Hsun-Hui Adviser

Fang Yu-Hsien Adviser

Ou Shing-Shiang Adviser

Huoh Lynn Adviser

Ling Jong-Yuan Adviser

Hsi Li-hsueh Lisa Adviser

Tajikistan Said Davlatali Governor

Khikmatullozoda Nematullo Alternate Governor

Thailand Tantivorawong Apisak Governor

Sujjapongse Somchai Alternate Governor

15


Suteethorn Chularat Temporary Alternate Governor

Rojanavanich Suwit Temporary Alternate Governor

Kosolpisitkul Warotai Temporary Alternate Governor

Vimolsiri Porametee Temporary Alternate Governor

Jongwilaikasem Katesaraporn Adviser

Tulayasathien Soraphol Adviser

Eksomtramate Sunee Adviser

Lertwattanarak Parkpoom Adviser

Tanongsakmontri Benjarat Adviser

Chantasakda Paritat Adviser

Sinsiri Newin Adviser

Jaihong Upama Adviser

Kehatat Chanita Adviser

Prompat Nakarin Adviser

Samritdetkhachorn Woraphot Adviser

Santiprabhob Veerathai Adviser

Supapongse Mathee Adviser

Mahasandana Alisara Adviser

Sumawong Kaweevudh Adviser

Timor-Leste Lopes Helder Alternate Governor

Soares Balbina Temporary Alternate Governor

Dos Reis Abel Jose Adviser

Tonga Eke 'Aisake Valu Governor

Kioa Sione Ngongo Temporary Alternate Governor

Palu Aholotu Temporary Alternate Governor

Turkey Genc Ahmet Temporary Alternate Governor

Tatlılıoğlu Fatih Temporary Alternate Governor

Gundogdu Osman Temporary Alternate Governor

Dönmez Yusuf Adviser

Turkmenistan Annadurdyyev Merdan Governor

Rahmankulov Jumanazar Adviser

Tuvalu Toafa Maatia Governor

Iulai Letasi Alternate Governor

Leuelu Tine Adviser

Niuatui Niuatui Adviser

16


Teo Penielu Penitala Adviser

Teo Siose Penitala Adviser

Vaaia Manraoi Adviser

United Kingdom Montgomery Richard Temporary Alternate Governor

Sundstrom Bo Temporary Alternate Governor

Rose Philip Temporary Alternate Governor

Briffa Gregory Adviser

Munnien Nandini Adviser

United States Lago Maria Louise (Marisa) Temporary Alternate Governor

Latortue Alexia Temporary Alternate Governor

Strauss Michael Temporary Alternate Governor

Kaproth Robert Adviser

McCoy Christopher Adviser

Tineo Victor Adviser

Gerber Lena Adviser

Hart Halliday Adviser

Uzbekistan Azimov Rustam Governor

Gulyamov Ravshan Temporary Alternate Governor

Rakhimov Saidakhmat Temporary Alternate Governor

Khidoyatov Davron Adviser

Artikhodjaev Sadriddin Adviser

Lolahanov Nodir Adviser

Amanov Durbek Adviser

Rasulov Mamur Adviser

Vanuatu Pikioune Gaetan Governor

Sewen Tony Amos Alternate Governor

Athy Simeon Temporary Alternate Governor

Viet Nam Hong Nguyen Thi Alternate Governor

Huu Chi Nguyen Temporary Alternate Governor

Hanh Hoang Thi Phuong Adviser

Trung Bui Quang Adviser

Doan Manh Tu Adviser

Thu Do Thi Hoai Adviser

Han Truong Duc Adviser

17


Thanh Tu Thi Kim Adviser

Hai Hoang Adviser

Tuan Anh Pham Adviser

Dieu Linh Hoang Adviser

Lan Anh Nguyen Adviser

Cam Chi Nguyen Adviser

Hieu Le Trung Adviser

OBSERVERS

Organization Last Name First Name

Agence Francaise de Developpement Mulliez Amuary

Haye Emmanuel

Guicquero Yves

Pacaut Pascal

Pires Jean-Claude

d’Amico Ornella

ASEAN+3 Macroeconomic Research Office Lee Jae Young

Poonpatpibul Chaipat

Zhang Xiangzhi

Hong Seung Hyun

Nemoto Yoichi

Tan Chia Kiat, Anthony

Han Beomhee

Nomura Munenari

Pang QiYing, Faith

Asian Infrastructure Investment Bank Jin Liqun

Alexander Danny

Zhou Yong

Chen Huan

Bell Henry

Association of South East Asian Nations Lim Hong Hin

Bank for International Settlements Remolona Eli

Patel Nikhil

Black Sea Trade and Development Bank Delikanli Ihsan Ugur

Aksenov Valery

CAB International Rangi Dennis

Zhang Qiaoqiao

Abrahams Phil

2


Corporacion Andina de Formento Sarmiento Hugo

Williams Holly

Council of Europe Development Bank Wenzel Rolf

Eurasian Development Bank Cherekaev Alexey

European Bank for Reconstruction and Development Quattrociocche Enzo

European Bank for Reconstruction and Development Malige Francis

Khanjenkova Natalia

Galbiati Ball Stefania

Milesi Eric

Martins Patricia

Regalado Patricia

Jones Gary

European Central Bank Bellmann Rebekka

European Commission Amilhat Pierre

Duchateau Koen

Steinle Ulrich

European Investment Bank Taylor Jonathan

Munini Paulo

Walsh Patrick

Schim van der Loeff Bram

Vermeulen Floris

Diez Fraile Angel

Mate Günther

European Stability Mechanism Strauch Rolf

Cheng Gong

Food and Agriculture Organization of the United Nations Merino Gustavo

International Finance Corporation Pathak Vivek

Miller Stephanie

Fuelster Karsten

Xu Yuan

3


Ahoua Philippe

Borlini Sabrina

Groesbeek John

Cornish Dettlaff Kathleen

Cross Andrew

Drummond Georgie

Ebel Esther

Mueller-Voigts Simone

International Fund for Agricultural Development Hessel Sarah

International Investment Bank Potapov Georgy

International Monetary Fund Furusawa Mitsuhiro

Brekk Odd Per

Ganelli Giovanni

Joshi Bikas

International Think-Tank for Land-Locked Developing Odbayar ErdenetsogtCountries Sosorbaram Ariunaa

Japan Bank for International Cooperation Watanabe Hiroshi

Horiguchi Munetaka

Baba Seigo

Suzuki Fumio

Kishioka Masashi

Kitajima Toshiaki

Matsui Daisuke

Morita Masahiro

Japan International Cooperation Agency Kanzaki Yasushi

Yanagisawa Kae

Hirota Koki

Muto Megumi

Hirosawa Masayuki

Iwama Nozomi

Yasui Takehiro

Tokuda Masato

Inagaki Yoshitaka

4


Kawase Tomohiro

Ono Shotaro

Hara Shohei

Okamura Akio

Fukaya Haruna

Takahashi Ryosuke

Yahara Yukiko

Kreditanstalt für Wiederaufbau Schröder Ulrich

Michalak Klaus Reinhold

Kloppenburg Norbert

Opitz Stephan

Strauß Reinhold

Tawfik Yasmin

Eschemann René

Haller Anette

Heimburger Christine

Witt Eva

Zymelka Olaf

Horschke Brit

Yildirim Salih

Boehnke Judith

Haake Rebecca

Beitz Steffen

Kuwait Al-Bahar Waleed

Al-Waqayan Hesham

Multilateral Investment Guarantee Agency Fall Muhamet Bamba

Histed Timothy James

Kwon Jae Hyung

Sclovscaia Olga

Nordic Development Fund Normann Henrik

Hellman Pasi

Nordic Investment Bank Mortensen Soren

5


OPEC Fund for International Development Bukader Imhemed

Djojosugito Reza

Al-Mahdi Jaafar

Pacific Islands Forum Secretariat Fong Toy Andie

Prasad Raymond

Russian Federation Korchagin Valery

Yazhlev Maxim

South Asian Assoc. for Regional Coop. Lakshmanan Savithri

State Secretariat for Economic Affairs Geiger Alain

United Nations Convention to Combat Desertification Hebel Axel

United Nations Economic and Social Commission for Akhtar ShamshadAsia and the Pacific Hahm Hongjoo

United Nations Industrial Development Organization Yong Li

Klose Christoph

United States Agency for International Development Gibson William

World Bank Dixon Annette

Kwakwa Victoria

Choi Heenam

Miyang Tembon Mercy

Zachau Ulrich

Rama Martin

Dongier Philippe

Dyer Nichola

Sur Mona

Do Dung Viet

Parent Kimberly

Layrol Valerie

Um Ye Rin

Klein Natalie

Melecky Martin

6


World Trade Organization Auboin Marc

BOARD OF DIRECTORS

Executive Director Alternate Executive Director Director's Advisor

Won-Mok Choi M P D U K Mapa Pathirana Se Hoon Lee

Yuan-Han Chi*

Mathew Adam Fox Richard Michael Sisson Amin Muradov

Maurizio Ghirga Johannes Schneider Juan Fernandez-Cuervo*

Martin Amar*

Koichi Hasegawa* Masashi Tanabe Masashi Hosomi

Gaudencio Hernandez, Jr. Muhammad Sami Saeed* Jerry Nathan

Umesh Kumar Sharafjon Sheraliev Ashish Vachhani

David Finlay Murchison Jan Willem van den Wall Bake Joar Lonning Strand

Theo Larsen*

Mario Sander Veronika Baumgartner* Philip Rose*

Osman Gundogdu*

Bhimantara Widyajala Mario Guiseppe Di Maio Lesieli Tufui Faletau

Zhongjing Wang* Wenxing Pan Hai Wang

Philaslak Yukkasemwong Rokiah HJ Badar* Jaya Kumaran K P Vengadala*

Yong Seng Soh*

VACANT Michael Strauss* Christopher McCoy*

Halliday Hart

*Also listed as Delegate

ADB PRINCIPAL OFFICERS AND SENIOR STAFF

President Takehiko Nakao

Vice Presidents Stephen Groff

Thierry De Longuemar

Wencai Zhang

Bambang Susantono

Diwakar Gupta

Deborah Anne Stokes

The Secretary WooChong Um

Treasurer Pierre Van Peteghem

Chief Economist and Director General, Economic Research and Regional Cooperation Department

Shang-Jin Wei

General Counsel Christopher Stephens

Managing Director General Juan Miranda

Director General, Budget, Personnel, and Management Systems Department

Toshio Oya

Director General, Central and West Asia Department Sean O'Sullivan

Director General, East Asia Department Ayumi Konishi

Director General, Independent Evaluation Department Vinod Thomas

Director General, Pacific Department Xianbin Yao

Director General, South Asia Department Hun Kim

Director General, Southeast Asia Department James Nugent

2

Director General, Strategy and Policy Department Indu Bhushan

Director General, Sustainable Development and Climate Change Department

Maria Carmela Locsin

Director General, Operations Services and Financial Management Department

Ramesh Subramaniam

Head, Office of Anticorruption and Integrity Clare Wee

Head, Office of Cofinancing Operations Rune Stroem

Principal Director, Department of External Relations Satinder Bindra

Deputy Director General, Central and West Asia Department Hong Wei

Deputy Director General, East Asia Department Amy Leung

Deputy Director General, Pacific Department James Patrick Lynch

Deputy Director General, Private Sector Operations Department Michael Peter Barrow

Deputy Chief Economist and Deputy Director General, Economic Research and Regional Cooperation Department

Juzhong Zhuang

Deputy Director General, Sustainable Development and Climate Change Department and concurrently Chief Compliance Officer

Nessim Ahmad

Deputy Director General, South Asia Department Diwesh Sharan

Deputy Director General, Southeast Asia Department Noriko Ogawa

Deputy Director General, Strategy and Policy Department Tomoyuki Kimura

Deputy Treasurer Kazuki Fukunaga

Director, Climate Change & Disaster Risk Management Division Preety Malhotra Bhandari

Director, Department of External Relations Omana Nair

Director, Macroeconomics Research Division Joseph Zveglich

Director, Office of Cofinancing Operations Sujata Gupta

3

Director, Office of Public-Private Partnership Takeo Koike

Director, Procurement Division 2 Walter Poick

Director, Private Sector Financial Institutions Division Christine Engstrom

Director, Infrastructure Finance Division 2 Christopher Thieme

Director, Portfolio Management Division Craig Roberts

Director, Private Sector Transaction Support Division Shantanu Chakraborty

Director, Social Development, Governance and Gender Division Bartlet Edes

Director, Strategy, Policy, and Interagency Relations Division Valerie Reppelin-Hill

Country Director, Afghanistan Resident Mission Thomas Panella

Assistant Secretary Leah Gutierrez

Assistant Treasurer Tobias Hoschka

Assistant Treasurer, Investments Division Michael Jordan

Assistant Treasurer, Funding Division Maria Lomotan

Chief Advisor to the President Naoya Jinda

Special Project Facilitator Jitendra Shah

Chair, Compliance Review Panel Dingding Tang

Dean, ADB Institute Naoyuki Yoshino

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